MARKET WRAPS
Watch For:
Canada Retail Trade for May; Canada New Housing Price Index for June; Earnings from American Express
Today's Top Headlines/Must Reads:
- Untangling the U.S. From China's Economy Is Messy
- Americans Feel Better About the Economy. Should We Believe Them?
- Big Regional Banks Reported Stable Deposits. For Investors, That Counts as Great News.
- China Launches Measures to Boost Car, Electronics Consumption
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Opening Call:
Stock futures edged higher on Friday, pointing to a positive finish for the week and to markets stabilizing after the tech-led stumble in the previous session.
"The current market is priced for perfection. When a company comes out, beats, and guides higher, it still can go down if there are any concerns or worries," Navellier & Associates said, pointing to Tesla's results in particular.
There's also the specter of the special Nasdaq rebalancing, which will take place Friday after the close and be effective for Monday's open, as well as the expiration of some $2.3 trillion of U.S.-listed options.
"There also seems to be a little anxiety on some of the top tech stocks as they are going to get a haircut on Monday on the Nasdaq realignment," Navellier said.
Global stock indexes were mixed as Europe's Stoxx 600 inched down, while Hong Kong's Hang Seng Index rose 0.8% and Japan's Nikkei 225 edged down 0.6%.
Pre-Market Movers
CSX recorded a decline in top- and bottom-line results against a backdrop of challenges including long-running staffing shortages and intermodal activity. Shares fell 3.8%.
Intuitive Surgical fell 4.8% after it posted second-quarter adjusted earnings that missed analysts' estimates.
Knight-Swift Transportation reported a 21% decline in second-quarter revenue on weaker demand for its truckload businesses.
Nikola rose more than 3%. It said earlier this week it had found a buyer for its hydrogen-energy site in Phoenix.
Sirius XM dropped more than 8% premarket, partially reversing a 42% run-up in the previous session.
Tesla shares rose nearly 1.9% premarket, putting them on track to recoup some of the previous session's. A 9.7% pullback Thursday had weighed on broad indexes.
Forex:
Short-term bond yield moves suggested the dollar, which rose to an eight-day high against a basket of currencies this week, could be higher, ING said.
"One could argue that the dollar should even be a little higher given that two-year U.S. yields have retraced about 50% of their drop in the first half of July and the DXY has only retraced one-third of its losses, " ING said.
Trade should be quiet, however, as traders avoid large positions before next week's decisions by the Federal Reserve, European Central Bank and Bank of Japan, it added.
Energy:
Oil prices rose and were on course for a fourth weekly gain thanks to tightening supplies.
Saudi Arabia's and Russia's supply cuts are beginning to bite on global oil balances and have overcome fears about China's sluggish economy.
"Evidence of supply cuts from Saudi Arabia and Russia have been the trigger for the rebound in prices this month," ANZ said. "That tightness in supply is already showing up in inventories."
Metals:
Base metals and gold prices pushed higher as a weaker dollar and reports of Chinese government support for real estate and the auto market helped boost demand.
"There is increasing optimism that the Chinese Communist Politburo meeting due to take place over the next several days could unveil new stimulus measures, in which case we could see further gains materialize in the metals space," Commodity Research Group said.
TODAY'S TOP HEADLINES
Streaming Brought Hollywood to a Standstill. Now Comes the Pain.
LOS ANGELES-Hollywood's biggest strike in 60 years is exposing fault lines between the industry's giants, with traditional entertainment companies expected to take a near-term hit while streamers such as Netflix are better positioned for a long stalemate.
Though they hope for a quick resolution, entertainment executives say they are contemplating the prospect that the joint strike by actors and writers could drag on for months-even through the end of the year.
White House Says Amazon, Google, Meta, Microsoft Agree to AI Safeguards
WASHINGTON-The Biden administration says it has reached a deal with big tech companies to put more guardrails around artificial intelligence, including the development of a watermarking system to help users identify AI-generated content, as part of its efforts to rein in misinformation and other risks of the rapidly growing technology.
The White House said seven major AI companies-https://urldefense.com/v3/__http://Amazon.com__;!!F0Stn7g!HAjLSqJBmcww0f2mlYzQBdqOzrVZ3vnDttN56dqWSdj95BqnvhdQjN2kRx1BnglXKeHc854ZIs-1TKdv0WIYIFbCOwVLVLwO95_szmbYz5E$ , Anthropic, Google, Inflection, Meta Platforms, Microsoft and OpenAI-are making voluntary commitments that also include testing their AI systems' security and capabilities before their public release, investing in research on the technology's risks to society, and facilitating external audits of vulnerabilities in their systems.
The Apple Tax Play That Keeps Uncle Sam at Bay
Apple's stock is near all-time highs and the company's market value has topped $3 trillion. Yet some of its debt is trading at prices ranging from around 69 cents to 84 cents on the dollar.
Typically, such a mismatch would signal a sharp divergence between what stock and bondholders think of a company's prospects. In this case, the hobbled debt prices reflect drastic changes in interest-rates.
Japan's Consumer Inflation Gained Pace Slightly in June
TOKYO-The pace of consumer inflation in Japan quickened slightly in June, with falling electricity bills balancing out price increases for most other goods.
Overall consumer prices rose 3.3% from a year earlier in June, compared with a 3.2% increase in May, government data showed Friday.
UK Retail Sales Rose More Than Expected in June on Start of Summer Discount Season - Update
U.K. retail sales rose more than expected in June, driven by both food and nonfood purchases, after the start of summer promotional season increased footfall.
Retail-sales volumes ticked up 0.7% on month, higher than the downwardly revised increase of 0.1% in May, data from the Office for National Statistics showed Friday.
Pro Take: How the Pandemic and Inflation Altered Hospitality Economics in Six Charts
The number of U.S. jobs is breaking records, but the hospitality sector, with more than 16 million workers, hasn't fully recovered from the pandemic as the Federal Reserve fights inflation with higher interest rates.
Rising wages as well as inflation have crimped profit margins at restaurants, hotels and other leisure businesses, leading to reluctant hiring.
Where Is Kamala Harris?
Vice President Kamala Harris planned to campaign extensively for President Biden's re-election, but her early schedule suggests otherwise.
In the 10 weeks following Biden's campaign launch, the vice president has traveled to nine states-three of them considered battlegrounds in the 2024 election-and appeared at seven fundraisers, according to her calendar.
U.S. Ambassador to China Hacked in China-Linked Spying Operation
Hackers linked to Beijing accessed the email account of the U.S. ambassador to China, Nicholas Burns, in an attack that is believed to have compromised at least hundreds of thousands of individual U.S. government emails, according to people familiar with the matter.
Daniel Kritenbrink, the assistant secretary of state for East Asia, was also hacked in the cyber-espionage attack, the people said. The two diplomats are believed to be the two most senior officials at the State Department targeted in the alleged spying campaign disclosed last week, one of the people said.
Russia Seeks to Divert Ukrainian Forces Away From Counteroffensive
LYMAN, Ukraine-As Ukrainian forces press a slow and costly counteroffensive to retake Russian-occupied territory in the south and east of the country, Moscow's troops in one corner of northeastern Ukraine are pushing back in an effort to divert Kyiv's army.
"They are constantly trying to advance, but we are fighting back," said Lt. Oleksandr Zhytar, the commander of a howitzer battery stationed in hilly fields near the northeastern town of Lyman.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Nothing major scheduled
Economic Calendar (ET):
0830 May Retail trade
0830 Jun New Housing Price Index
Expected Major Events for Friday
05:00/JPN: Jun Steel Production
06:00/UK: Jun Public sector finances
06:00/UK: Jun UK monthly retail sales figures
12:30/CAN: Jun New Housing Price Index
12:30/CAN: May Retail trade
14:00/US: Jun State Employment and Unemployment
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Friday
Acme United (ACU) is expected to report $0.52 for 2Q.
American Express Co (AXP) is expected to report $2.81 for 2Q.
Andrea Electronics Corp (ANDR) is expected to report for 1Q.
AutoNation (AN) is expected to report $6.02 for 2Q.
Bank of the James Financial Group Inc (BOTJ) is expected to report for 2Q.
Comerica Inc (CMA) is expected to report $1.86 for 2Q.
First Savings Financial Group Inc (FSFG) is expected to report $0.55 for 3Q.
German American Bancorp (GABC) is expected to report $0.67 for 2Q.
Huntington Bancshares Inc (HBAN) is expected to report $0.34 for 2Q.
Interpublic Group of Cos (IPG) is expected to report $0.58 for 2Q.
Manhattan Bridge Capital (LOAN) is expected to report $0.11 for 2Q.
Middlefield Banc Corp (MBCN) is expected to report $0.59 for 2Q.
Northeast Community Bancorp Inc (NECB) is expected to report for 2Q.
Norwood Financial Corp (NWFL) is expected to report for 2Q.
Regions Financial Corp (RF) is expected to report $0.60 for 2Q.
(MORE TO FOLLOW) Dow Jones Newswires
07-21-23 0623ET
