MARKET WRAPS
Watch For:
S&P CoreLogic Case-Shiller Home Price Index for October; Canadian markets closed for the Boxing Day holiday
Today's Top Headlines/Must Reads:
- After Muni-Bond 'Bloodbath,' Expectations for 2023 Are Muted
- Laid Off Tech Workers Quickly Find New Jobs
- Cash Cushions Dwindle at U.S. Pension Funds
- Chip Inventories Swell as Consumers Buy Fewer Gadgets
Follow WSJ market coverage here
Stock futures rose on Tuesday, ahead of the final trading week of 2022, indicating positive market moves when regular trading resumes after the three-day Christmas holiday.
Investors could be drawing some optimism from news that China will drop quarantine requirements for incoming travelers starting in January.
"This is certainly something that traders and investors have been hoping for a long period of time as China remained very strict with its zero-covid policy throughout this year," AvaTrade said.
"Nonetheless, recession remains a major among investors and traders, and this is likely to keep a cap on any corrective moves in the markets. It is widely anticipated that trading volume is expected to remain on the low side due to a short holiday week," AvaTrade added.
Stocks to Watch
Metacrine said it mutually agreed with Equillium to terminate their merger deal. Shares rose 5.4% in after-hours trading on Friday.
Southwest Airlines fell 3.5% after the airline canceled more than two-thirds of its flights Monday and plans to slash its schedules Tuesday and Wednesday, in a meltdown that stranded thousands of customers.
Tuesday Morning said it plans to voluntarily delist its common stock about a year and a half after listing on the Nasdaq Capital Market. Shares slumped 24% in after-hours trading on Friday.
Tesla fell 1.5% premarket. Reports said the company suspended production at its Shanghai plant on Saturday, with the suspension planned to last about a week.
Other movers
American depositary receipts of Chinese companies climbed Tuesday.
Alibaba, JD.com, and Baidu each rose around 2% in premarket trading after China's National Health Commission outlined plans to downgrade restrictions to control the spread of coronavirus late on Monday.
Economic Insight
The severe winter storm that swept large swaths of the U.S. won't cause major damage to economic growth in the fourth quarter, Oxford Economics said.
Some industries will be disrupted and this could bring a rise in initial jobless claims in the next couple of weeks, but the shock's short and temporary nature means that significant production and revenue losses won't be sustained, it added.
"Weather-sensitive industries, namely housing, are sure to be affected," Oxford Economics said, adding that any loss in economic output will likely be made up in the first quarter of 2023.
Forex:
The dollar fell, pressured by a boost to risk appetite from news that China has eased Covid-19 rules further and plans to lift quarantine requirements on international arrivals early January.
It stayed well within its recent tight trading range against a basket of currencies as activity is scant due to the year-end holidays.
Energy:
Oil prices gained 0.5% in Europe after China said it would relax Covid-19 rules for inbound travelers.
Beijing's move is the latest step in its efforts to reopen the Chinese economy following years of lockdown and is giving a fillip to oil demand hopes.
"We believe that the reopening in China should help offset weaker demand in the U.S. and Europe," SPI Asset Management said.
Metals:
Gold prices edged higher in Asia as the precious metal remained supported by seasonal trends and central bank buying.
Apart from the institutional buying, individual investors also recalibrate their 2023 portfolios as investment confidence tapers, buying gold as part of a diversification strategy, SPI Asset Management said.
TODAY'S TOP HEADLINES
Southwest Airlines CEO Says More Cancellations Ahead as Airline Tries to Recover
Southwest Airlines Co. canceled more than two-thirds of its flights Monday and plans to slash its schedules Tuesday and Wednesday, in a meltdown that stranded thousands of customers and that worsened while other airlines began to recover from the holiday winter storm.
"We had a tough day today. In all likelihood we'll have another tough day tomorrow as we work our way out of this," Chief Executive Bob Jordan said in an interview Monday evening. "This is the largest scale event that I've ever seen."
Chinese Drugmakers' Shares Plunge as Pfizer's Paxlovid Gains Market Share
Shares of Chinese pharmaceutical companies plunged Tuesday morning on Chinese bourses, continuing a slide that began in the face of competition from Pfizer's Covid-19 drug Paxlovid earlier this month.
Shares of Shijiazhuang Yiling Pharmaceutical, a traditional-Chinese-medicine producer of Covid-treatment drugs, fell by as much as 9.6%. The company's share price has fallen 40% from its peak on Dec. 8, when Pfizer's Covid-19 drug Paxlovid started being widely used in China.
Amorepacific Shares Rally on Hopes for Recovery in China Cosmetics Demand
Amorepacific Corp.'s shares rallied Tuesday on hopes for a recovery in Chinese cosmetics demand amid easing pandemic restrictions there.
Shares in the South Korean beauty-product company, which has a significant business presence in China, rose as much as 6.4% to 141,500 won ($110.99) in morning trading, the biggest intraday gain in more than a month, according to FactSet. The stock outperformed the benchmark Kospi's 0.3% advance in morning trade.
After Muni-Bond 'Bloodbath,' Expectations for 2023 Are Muted
State and local government bonds are on track to post their worst yearly performance since 1981, a deep slump for an investment prized for safety and stability.
"This year was a bloodbath," said Nicholos Venditti, a municipal bond fund portfolio manager with Allspring Global Investments. "It was a bloodbath in munis the same way it was across all asset classes."
Laid Off Tech Workers Quickly Find New Jobs
Most laid off tech workers are finding jobs shortly after beginning their search, a new survey shows, as employers continue to scoop up workers in a tight labor market.
About 79% of workers recently hired after a tech-company layoff or termination landed their new job within three months of starting their search, according to a ZipRecruiter survey of new hires. That was just below the 83% share of all laid-off workers who were re-employed in the same time frame.
Cash Cushions Dwindle at U.S. Pension Funds
Cash holdings are the lowest since the financial crisis at U.S. government pension funds and just above last year's 13-year low for U.S. corporate pensions, heading into a year that many on Wall Street expect to test investors.
Cash holdings hit 1.9% of assets at state and local government pension funds and 1.7% of assets at corporate pension funds as of June 30, according to an annual snapshot from Wilshire Trust Universe Comparison Service.
China to Open Borders as Covid-19 Cases Rise
BEIJING-Chinese health authorities plan to lift Covid-19 quarantine requirements on international arrivals early next month, taking one of the country's biggest steps to ease restrictions since the pandemic began even as case numbers remain high.
China has maintained among the world's most restrictive coronavirus lockdown measures, slowing its economy significantly and sparking anger. Following waves of protests this fall, authorities abruptly abandoned the country's stringent zero-Covid-19 strategy early this month.
China Revises Its 2021 GDP Growth Up to 8.4%
China has revised the country's economic growth in 2021 up to 8.4% from the 8.1% reported in January, raising the comparison base for China's GDP expansion this year.
China's GDP reached 114.9 trillion yuan (US$16.5 trillion) in 2021, CNY556.7 billion higher than what was calculated in January, the National Statistics Bureau said Tuesday.
China Industrial Profit Fell in First 11 Months
China's industrial profit fell at a faster rate in the first 11 months of the year compared with the first 10 months, official data showed Tuesday, as renewed Covid-19 flare-ups weighed on the country's business activities.
Industrial profit fell 3.6% from a year earlier in the January to November period, widening from a 3% drop recorded in the first 10 months, the National Bureau of Statistics said.
Russia's Gas Production, Exports Shrink Under Sanctions Pressure
MOSCOW-Russia's natural-gas production will fall by 12% this year and its exports will decline by about a quarter, a high-ranking Russian official said Monday in a sign of international pressure on the country's energy market due to sanctions over its war in Ukraine.
Russian Deputy Prime Minister Alexander Novak told Russia's state news agency TASS that the drop in gas production compared with last year was largely due to the closure of export infrastructure. Most of Russia's natural-gas exports are via pipeline, primarily to Europe.
Japan to Require Covid-19 Tests for Chinese Visitors
TOKYO-Japanese Prime Minister Fumio Kishida said Tuesday that travelers entering Japan from China will be required to take a Covid-19 test and those testing positive will be quarantined for seven days.
Mr. Kishida said it is an emergency move in response to the explosion of Covid-19 infections in China. The action, which takes effect Friday, means Chinese travelers will face tighter restrictions than visitors from many other countries who need only proof of vaccination to enter Japan.
Taiwan to Extend Mandatory Military Service
Taiwan has decided to extend mandatory military service for male citizens, a one-time political taboo that morphed into an imperative in the face of growing Chinese aggression and intensifying competition between Washington and Beijing.
(MORE TO FOLLOW) Dow Jones Newswires
12-27-22 0621ET
