MARKET WRAPS
Watch For:
Trade for August; Weekly Jobless Claims; Canada Trade for August; Fed speak from Mary Daly, Loretta Mester
Today's Top Headlines/Must Reads:
- Rising Interest Rates Mean Deficits Finally Matter
- Amazon, Microsoft Face UK Competition Probe Over Cloud Dominance
- FTX Employees Found Alameda's Secret Backdoor Months Before Collapse
Follow WSJ market coverage here
Opening Call:
Stock futures meandered with mildly fluctuating Treasury yields early on Thursday, amid signs the bond market sell-off was abating.
Equity-index futures trading continued to be led by moves in the Treasury market, as traders parse economic data to determine the Federal Reserve's policy trajectory.
"One [piece of] good news for the jobs market, and one bad news. Everyone is now holding his or her breath into Friday's jobs data, which will determine whether we will end this week with a sweet or a sour taste in our mouth," Swissquote Bank said.
"Sweet would be loosening jobs data, sour would be a still-strong jobs data which would fuel the hawkish Fed expectations and further boost U.S. yields...[which] are at a critical moment."
Overseas, Europe's Stoxx 600 edged up and the yield on the benchmark 10-year German bund barely moved, while Japan's Nikkei 225 climbed 1.8%.
Mainland Chinese markets were closed for a public holiday.
Premarket Movers
Amazon and Microsoft both face an antitrust probe in the U.K. over their cloud dominance after the country's communications regulator alleged that certain market features could limit competition. Amazon and Microsoft shares traded slightly down premarket.
BlackBerry rose 4.2% after announcing it would split into two separate businesses, and planned to spin off its Internet-of-Things business in an initial public offering. The IPO would be targeted for the first half of the next fiscal year, BlackBerry said.
Clorox was falling around 5% after cutting its fiscal first-quarter outlook following a cybersecurity attack.
Costco Wholesale said same-store sales in September rose 4.5% from a year earlier, accelerating from growth of 4.3% in August. E-commerce sales rose 3.7%. The stock was down slightly.
Exxon Mobil declined 0.6% after it said its third-quarter earnings would get a lift from rising crude oil prices. In a regulatory filing, Exxon said it expects a change in liquids prices to boost profit in the period by between $900 million and $1.3 billion.
Rivian Automotive fell around 9% after it announced plans to raise more funds. Rivian, which has struggled to keep production up and costs down, said it intends to offer $1.5 billion worth of convertible notes.
Tesla was dipping 0.5% after closing with a gain of 5.9% on Wednesday.
Forex:
The dollar edged lower after Wednesday's weaker-than-expected ADP employment survey but these falls are unlikely to last and gains for the euro and sterling against the U.S. currency should be temporary, UniCredit Research said.
"Soft U.S. data, such as the ADP employment survey yesterday, do not seem to be enough to challenge the dollar strength."
The most weaker data can offer is to temporarily reduce the weakness of other FX majors against the dollar, but they are not enough to spark a long-lasting recovery, at least for EUR/USD and GBP/USD, it added.
Energy:
Oil prices inched higher in Europe, having fallen sharply on Wednesday as data from the U.S. showed rising gasoline inventories.
This was despite crude oil inventories falling and Saudi reaffirming its commitment to cut supply by 1 million barrels a day until the end of the year.
Metals:
Base metals were lower while gold was flat in early London trading, with weak demand from China and the prospects of rate hikes from the Fed keeping prices capped.
"The markets await unemployment rate data on Friday, which will paint a better picture of the current state of the labor market," Sucden Financial said.
"While the economy has remained robust in the face of tight monetary policy, we expect further softening in the labor market in the coming months."
Volatility should remain after Chinese investors return from seasonal holidays next week, with downside likely to persist, Sucden added.
Read Relationship With Society Key for Bringing New Mining Projects Online, Codelco Says
Read Low Copper Prices, High Financing Costs Seen As Barriers to Mining Expansion
TODAY'S TOP HEADLINES
UAW's Strike Strategy: Lots of Attention, Muted Financial Pain for Now
Three weeks in, the United Auto Workers strike against Detroit's carmakers has nearly all the hallmarks of a dug-in labor battle: euphoric worker walkouts, rushed contingency plans, wall-to-wall media coverage and fiery rhetoric.
The one thing missing-at least so far-is much financial pain, on either side.
Exxon expects profit bump from oil prices of around $1 billion in third quarter
Exxon Mobil Corp. said in a filing late Wednesday that its third-quarter profit is likely to get a bump of around $1 billion from rising crude prices.
Exxon XOM estimated between $900 million and $1.3 billion more than second-quarter profit due to crude-price changes, and between $200 million and $400 million in gas-price changes.
America's Food Giants Confront the Ozempic Era
You just started taking Ozempic. Will you still crave that bag of potato chips?
Big food companies and investors are watching as Ozempic and other similar weight-loss drugs flow to millions of people, upending America's diet industry and raising new questions about how consumers will eat.
Where Have the Traders Gone? A $4 Trillion Market Is Stuck in a Rut
Hong Kong's $4 trillion stock market is having liquidity issues.
Trading volumes in the financial hub have slumped over the past three years, reflecting fading investor interest in buying and selling stocks on the city's exchange. Lower trading activity has also contributed to bigger swings in share prices and has become a sticking point for some Hong Kong-listed companies whose stocks barely trade on some days. That has also made it harder for the exchange to attract listings from global companies.
The Economy Needs Stability. McCarthy's Ouster Brings The Opposite.
Kevin McCarthy vowed just days ago to be "the adult in the room" when he forged a deal with Democrats to avert a government shutdown. In response, his party kicked him out of the room.
The historic ousting on Oct. 3 of the speaker of the House of Representatives, who was voted into office in January, leaves the party hamstrung and without a leader as Congress heads into what was supposed to have been a busy fall season of governing. It also appears to heighten the consequences for any future Republican speaker who dares work across the aisle, as McCarthy did.
As a result, the chance of a government shutdown in mid-November, when federal funding runs out, has spiked dramatically, adding to the economy's pile of worries at time when interest rates and oil prices are rising, student-loan payments are resuming, and labor strikes are proliferating. A protracted fight over the speaker's job - and after that, funding the government - could also spoil the soft-landing scenario that the Federal Reserve has sought to achieve as it seeks to tamp down inflation.
Top Republicans Jump Into Speaker Race After McCarthy Ouster
WASHINGTON-Several prominent Republicans jumped into the race for House speaker and pledged to unite their splintered party, a day after Kevin McCarthy was ousted in a vote orchestrated by hard-line conservatives, setting up a crowded race for the gavel.
House Majority Leader Steve Scalise, the No. 2 House Republican, announced his candidacy, as did Ohio Rep. Jim Jordan, chairman of the House Judiciary Committee and a founding member of the conservative House Freedom Caucus. A third member, Oklahoma Rep. Kevin Hern, told the Texas delegation that he planned to run as well as he laid the groundwork for a campaign.
Russia Withdraws Black Sea Fleet Vessels From Crimea Base After Ukrainian Attacks
Russia has withdrawn the bulk of its Black Sea Fleet from its main base in occupied Crimea, a potent acknowledgment of how Ukrainian missile and drone strikes are challenging Moscow's hold on the peninsula.
Russia has moved powerful vessels including three attack submarines and two frigates from Sevastopol to other ports in Russia and Crimea that offer better protection, according to Western officials and satellite images verified by naval experts. The Russian Defense Ministry didn't respond to a request for comment.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Nothing major scheduled
Economic Calendar (ET):
0815 Sep Official International Reserves
0830 Aug International merchandise trade
1000 Sep Ivey Purchasing Managers Index
Stocks to Watch:
Diversified Royalty Announces Acquisition Of BarBurrito Restaurants Trademarks, A 2.1% Dividend Increase Effective November 1, 2023 And October 2023 Cash Dividend
Expected Major Events for Thursday
02:00/JPN: Sep Imported Vehicle Sales
06:00/GER: Aug Foreign Trade
06:45/FRA: Aug Industrial Production Index
08:00/UK: Sep UK monthly car registrations figures
08:30/UK: Sep S&P Global / CIPS UK Construction PMI
11:30/US: Sep Challenger Job-Cut Report
12:15/CAN: Sep Official International Reserves
12:30/CAN: Aug International merchandise trade
12:30/US: Aug U.S. International Trade in Goods & Services
12:30/US: 09/30 Unemployment Insurance Weekly Claims Report - Initial Claims
12:30/US: U.S. Weekly Export Sales
13:00/RUS: Weekly International Reserves
14:00/CAN: Sep Ivey Purchasing Managers Index
14:30/US: 09/29 EIA Weekly Natural Gas Storage Report
16:00/US: Sep Monthly U.S. Retail Chain Store Sales Index
20:30/US: Foreign Central Bank Holdings
20:30/US: Federal Discount Window Borrowings
23:01/UK: Sep BRC-Sensormatic IQ Footfall Monitor
23:30/JPN: Aug Household Spending
(MORE TO FOLLOW) Dow Jones Newswires
10-05-23 0620ET
