MARKET WRAPS
Watch For:
Consumer Price Index for December; Weekly Jobless Claims
Today's Headlines/Must Reads
- Google Trims Hundreds of Jobs as It Marshalls Resources for AI
- Haley-DeSantis Food Fight Validates Trump's Debate Boycott Strategy
- China's Messaging to the U.S.: Don't Rock the Boat
Opening Call:
Stock futures traded higher on Thursday ahead of the key inflation print, with tech stocks continuing to lead gains.
Economists expect the consumer price index rose 3.2% year over year in December. The reading could provide evidence on whether or not the Federal Reserve will start cutting interest rates as early as March.:
Overseas stocks gained. The Nikkei 225 set another multidecade high and the Hang Seng rallied. Shares also rose across Europe.
Stocks to Watch
Amazon.com skipped a Wednesday deadline to offer remedies to the European Union over its $1.7 billion acquisition of Roomba maker iRobot, after the bloc had raised concerns that the deal could stifle competition in the robot vacuum cleaner market.
Premarket Movers
Citigroup said it was taking one-time charges of $1.3 billion related to exposures to geopolitical and economic risks in Argentina and Russia. The stock was down 0.6%.
Coinbase rose 4.6%, MicroStrategy gained 2.6%, and Marathon Digital was up 5.1% after the SEC approved the launch of the first spot Bitcoin exchange-traded funds.
KB Homes reported fourth-quarter earnings and sales that fell from a year earlier but the home builder said demand has been improving as mortgage rates fall. The stock fell 2%.
Mastercard was up 1% to $432.42. It closed with a market capitalization greater than $400 billion for the first time after the stock finished on Wednesday up 1.3%.
Meta Platforms gained 0.7% having rose 3.7% on Wednesday to close at $370.47, the highest close for shares in more than two years.
Warren Buffett's Berkshire Hathaway increased its stake in Occidental Petroleum to 34%, according to a filing with the SEC late on Wednesday. Shares of Occidental were up 1.5%.
Skydance Media has been discussing a bid for Paramount Global's parent company, National Amusements, The Wall Street Journal reported, citing people familiar with the matter. Paramount shares rose 1.4%.
Post-Close Movers
DocGo issued 2024 revenue outlook and said it planned to send a cease-and-desist letter to a short seller that has targeted the company. Its shares gained 7.4%.
Richardson Electronics swung to a loss as sales declined by a third in the second quarter. Shares fell 12%.
TechTarget and Informa agreed to combine in which the latter company's digital businesses will merge with the former to create a global platform for data and market access. TechTarget shares rose 15%.
Forex:
Thursday's inflation data will likely be key to determining the near-term outlook for the dollar and U.S. rates, though it won't be a "game-changer," Danske Bank Research said.
"We do not expect today's CPI release to be a game-changer, as we think the figures broadly will align with consensus."
The relatively loose financial conditions around the end of 2023, which helped push EUR/USD above 1.10, could very well tighten within the next couple of months, Danske Bank said, adding that it considers the euro remains a sell against the dollar from a strategic perspective.
Deutsche Bank said the dollar is pricing in the biggest interest-rate cuts of all G10 currencies, leaving very little safe-haven premium and suggesting the currency has room to strengthen.
Even as the Federal Reserve cuts interest rates, the dollar is still likely to remain a higher-yielder among major currencies, suggesting the dollar should rise near term, Deutsche Bank said.
"We see the risks skewed towards a stronger dollar for the first few months of 2024 with EUR/USD revisiting 1.05."
Bonds:
Bond yields fell as investors awaited the inflation data.
Some analysts have warned that the market may be too optimistic about the likely pace of Fed rate cuts given that reducing inflation further may prove harder.
"Importantly, absent improvements on the supply side, the outlook for continued disinflation to 2% is likely to get trickier from here--the so-called 'last mile' challenge," said Mohamed El-Erian, adviser to Allianz and Gramercy, in a post on X.
Energy:
Oil prices moved higher in Europe on market concerns about heightened tensions in the Middle East.
U.S. and British warships shot down one of the largest barrages of missiles and drones fired by Yemen's Houthi rebels into the crucial Red Sea shipping lane, while Secretary of State Antony Blinken continued his efforts to prevent the conflict in Gaza from escalating into a regional war.
Metals:
Metal prices were trading higher with Peak Trading Research saying a weaker U.S. inflation print would point to a dovish Fed, lower interest rates and a weaker dollar.
Nickel is stuck in a supply glu t that will take some time to clear, BMI said, as it downgraded its forecast for 2024 to $20,000/metric ton from $20,600/ton before. Weak demand in China and a subdued growth outlook across major markets will cap prices, BMI added.
Lithium investors are likely to experience further pain before any recovery in prices, according to Morgan Stanley. The China lithium carbonate price has fallen to roughly $12,000/metric ton, down 80% in 2023 and its lowest value since mid-2021. The battery metal's dramatic retreat has sparked debate on whether prices may be near a nadir.
TODAY'S TOP HEADLINES
Seven & i to Acquire Most of Sunoco's Convenience Store, Gasoline Retail Businesses
Seven & i Holdings' U.S. subsidiary will acquire most of Sunoco's convenience store and gasoline retail businesses for $950 million.
Through this deal, the U.S. subsidiary 7-Eleven, Inc. will purchase 204 stores in western Texas, New Mexico and Oklahoma, which will connect its 7-Eleven and Speedway store network alongside the interstate highway, the Japanese company said Thursday.
Thomson Reuters Launches $626 Million Offer for Pagero
Thomson Reuters is launching a $626 million cash bid for Pagero Group, beating a rival offer made by Vertex for the Swedish e-invoicing provider last month.
Thomson Reuters said Thursday that it will begin a public tender offer to acquire all of Pagero's shares on Friday. It intends to pay 40 Swedish krona a share, valuing the Gothenburg-based company at SEK6.4 billion ($626.0 million).
What to Watch in the CPI Report: Will Inflation's Rapid Downturn Stabilize?
Consumer inflation ticked up in December but underlying price pressures continued to ease, analysts estimate, fueling hopes that the economy can dodge a recession.
Iowa GOP Debate Takeaways: Haley, DeSantis Pummel Each Other
DES MOINES, Iowa-The race to become the sole alternative to Donald Trump in the GOP nomination contest grew sharper Wednesday as Ron DeSantis and Nikki Haley faced each other alone in a testy debate hours after the departure of the most vocal anti-Trump candidate.
Wednesday night's face-off at Drake University, broadcast on CNN, came after the presidential race was jolted by the withdrawal of Chris Christie, who gave no indication that he would endorse anyone as he tore into Republicans for failing to mount a stronger challenge to Trump, the former president and GOP nomination front-runner.
Chris Christie Drops Out of GOP Presidential Race
Chris Christie dropped out of the GOP presidential nomination race, giving a potential boost to Nikki Haley even as he declined to endorse another contender in the contest to dislodge front-runner Donald Trump.
The former New Jersey governor's abrupt exit comes as Republican voters will make their first selections in the Iowa caucuses on Monday, followed by the New Hampshire primary eight days later.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
None scheduled
Economic Calendar:
Nothing scheduled
Stocks to Watch:
Alamos Gold Sees 4Q Total Gold Production 129,500 Ounces; Sees 2024 Total Gold Production 485,000 Ounces-525,000 Ounces; Sees 2025 Total Gold Production 470,000 Ounces-510,000 Ounces; Sees 2026 Total Gold Production 420,000 Ounces-560,000 Ounces
Cogeco 1Q EPS C$2.21; 1Q Adj EPS C$2.57; 1Q Rev C$776.2M
Cogeco Communications 1Q EPS C$2.01; 1Q Adj EPS C$2.33; 1Q Rev C$747.7M
Lion Electric Gets $38 Million EPA Grant for 97 School Buses, Related Charging Infrastructure
Pembina Pipeline Announces C$1.8 Billion Public Note Offering
Thomson Reuters Recommends Public Tender Offer to Acquire 100% of Pagero Group; Offer at SEK40 Per Share in Cash; Offer Values All Pegero Shares at Approx SEK6.4B; Offer Needs Acceptance by Over 90% of Company's Shareholders
Expected Major Events for Thursday
02:00/JPN: Dec Imported Vehicle Sales
05:00/JPN: Nov Indexes of Business Conditions - Preliminary Release
09:00/ITA: Nov Industrial Production
11:00/FRA: Nov OECD CPI
13:30/US: Dec Real Earnings
13:30/US: Dec CPI
13:30/US: 01/06 Unemployment Insurance Weekly Claims Report - Initial Claims
13:30/US: U.S. Weekly Export Sales
15:30/US: 01/05 EIA Weekly Natural Gas Storage Report
16:59/GER: Nov Balance of Payments
19:00/US: Dec Monthly Treasury Statement of Receipts and Outlays of the U.S. Government
21:30/US: Federal Discount Window Borrowings
21:30/US: Foreign Central Bank Holdings
23:50/JPN: Dec Bank Lending
23:50/JPN: Dec International Transactions in Securities
23:50/JPN: 3Q Revised Balance of Payments
23:50/JPN: Nov Balance of Payments
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Thursday
Concrete Pumping Holdings Inc (BBCP) is expected to report $0.18 for 4Q.
EBET Inc (EBET) is expected to report for 4Q.
Educational Development Corp (EDUC) is expected to report for 3Q.
Quantum Corp (QMCO) is expected to report $-0.09 for 2Q.
RVL Pharmaceuticals PLC (RVLPQ) is expected to report for 3Q.
(MORE TO FOLLOW) Dow Jones Newswires
01-11-24 0617ET
