MARKET WRAPS

Watch For:

Existing Home Sales for December; Canada Retail Trade for November; Federal Reserve Board Governor Christopher Waller speaks at the Council on Foreign Relations

SLB, State Street, Regions Financial and Huntington Bancshares are due to report earnings before the open.

Today's Top Headlines/Must Reads:

- Consumer Prices Plateau as Inflation Slows to Prepandemic Levels

- China Shares May Provide Bright Spot in First Half

- Google Parent Alphabet to Cut 12,000 Jobs

- Ericsson Warns of Slowing 5G Orders in North America

- Elon Musk Sold Tesla Shares Before Company Acknowledged Weakness

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Opening Call:

Stock futures pointed to modest gains for Wall Street on Friday after the Dow Jones Industrial Average and S&P 500 declined for a third-straight day on concerns that the Federal Reserve's effort to tame inflation by raising interest rates could lead the U.S. into a recession.

AvaTrade said it believes "it is highly likely that we will see the Fed reducing the interest rate and the real reason investors are losing confidence or becoming a little wary about the stock market rally is that every day we hear more companies cutting job cuts and economic data is showing that economic engine is losing steam."

"This elevates concerns among traders. Perhaps the recession is going to be much deeper."

Stocks to Watch

Eli Lilly fell 2.1% after the FDA rejected the company's proposed new Alzheimer's disease treatment, saying they need more data from clinical testing.

American depositary receipts of Ericsson fell 5.4% after the Swedish telecommunications company missed fourth-quarter earnings expectations and issued a warning about its near-term margin outlook.

Netflix was rising 6% in premarket trading after the streaming giant posted better-than-expected fourth-quarter subscriber growth, and announced that founder and co-CEO Reed Hastings was moving to the executive chairman role.

Nordstrom reported a 3.5% sales decline for the recent holiday season, leading it to adjust its full-year outlook. Shares declined 5.8% in after-hours trading.

Regeneron Pharmaceuticals gained 1.3% after the stock was upgraded to Overweight from Neutral by analysts at J.P. Morgan.

SLB was rising 0.5% ahead of the release of fourth-quarter earnings.

T-Mobile declined 1.3% after disclosing that hackers gained access to personal data for 37 million of the wireless carrier's account holders.

Netflix boosted stocks across the streaming sector.

Roku was up 1.5%, Paramount Global was up 0.9%, and Disney gained 0.8%.

Forex:

The dollar stabilized after recent losses as an underperformance in stocks offset the negative turn in U.S. economic data, ING said.

For now, markets may feel comfortable with current dollar levels ahead of next week's fresh round of U.S. data, ING added.

"The DXY dollar index could hold above 102.00 today, with some focus on housing data and two Federal Reserve speakers."

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Skepticism over the Bank of England's determination to fight inflation could put pressure on sterling ahead of the central bank's next meeting, Commerzbank said.

The BOE is largely expected to raise rates 50 basis points at its February 2 meeting as data this week showed U.K. inflation remains elevated and the labor market is still tight, Commerzbank added.

"Of course, it remains to be seen whether the BOE will actually deliver, as two of the nine members had already voted in favor of unchanged rates at the last meeting in December."

BOE Governor Andrew Bailey also suggested Thursday that the BOE won't lift rates aggressively as he sees inflation falling rapidly, Commerzbank said.

Read Sterling Falls After UK Retail Sales Data Miss Forecasts

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The euro should rise further in the near term on the market's continued scaling back of Fed interest-rate expectations and the ECB's "hawkish" rhetoric, ING said.

"As long as U.S. data remains on the soft side, EUR/USD should benefit from a rather supportive rate differential."

EUR/USD could test 1.0900-1.0950 next week, but Friday may be quiet since the eurozone calendar is rather empty and ECB's Lagarde probably won't say anything new when she speaks again at Davos, ING said.

Lagarde signaled further large rate rises at Davos Thursday.

Crypto

Cryptocurrencies rose, shrugging off news that crypto lender Genesis has filed for Chapter 11 bankruptcy.

Genesis and its owner Digital Currency Group have been in negotiations with creditors since November. It becomes the latest casualty of the fallout from the collapse of digital-assets exchange FTX.

"This particular news is not completely new for the industry as many have been anticipating this for some time and the company has finally thrown in the towel," AvaTrade said.

Energy:

Prices for crude oil were moving higher in early European trading, with traders taking stock ahead of Lunar New Year celebrations starting this weekend.

The market should exercise more caution in the near term as higher covid cases in China is likely to affect oil demand in the near term, despite long term support for prices, SPI Asset Management said.

"Speaking from a long oil position, the market is too far over their skis at this stage of the reopening. And very susceptible to both the U.S. recession and central bank rate hike risk."

Metals:

Metal prices were higher ahead of Lunar New Year celebrations starting this weekend, which are likely to significantly reduce Asian trade over the next week.

Optimism is running high in the metals market, Fitch Solutions said.

It sees significant upside to prices despite weak demand currently in China with buying likely to rise after the seasonal lull.

A weaker U.S. dollar should "place a floor under metals priced in the currency as demand from emerging markets get a boost," Fitch said.

Copper Outlook

Swiss investment bank UBS is forecasting copper prices to continue rising this year, amid strong demand from China after its reopening from Covid-19 lockdowns.

The bank is forecasting prices to hit $10,250 a metric ton by September with this price to hold through to December, up from the $9,360 a ton seen today in London.

UBS said that low inventories and strong Chinese demand should result in a 70,000 ton market deficit in 2023.

"Grid-related infrastructure projects and electric vehicles should help Chinese copper demand expand 2.6% in 2023," it said, adding global copper demand should rise 3.1% this year.


TODAY'S TOP HEADLINES


Google Parent Alphabet to Cut 12,000 Jobs

Google parent Alphabet Inc. said it plans to eliminate roughly 12,000 jobs, reducing its staff by 6% and marking the company's largest-ever round of layoffs as it copes with a darkened economic outlook.

The reductions will cut across Alphabet units and geographies, the company said, though some areas, including recruiting and projects outside of the company's core businesses, would be more heavily affected.


'Angry Birds' Owner Gets Takeover Bid From Playtika

Rovio Entertainment Oyj said it received a takeover proposal from Israel's Playtika Holding Corp. for 751 million euros, equivalent to $813.5 million, sending its shares up 38% Friday.

Rovio, which helped pioneer the now-booming mobile-gaming industry with its 2009 "Angry Birds" hit, said the 9.05 euro-a-share bid represented a sweetened offer, following an earlier, undisclosed 8.50 euro bid by Playtika. Playtika specialized in casino-style mobile games before moving into casual games similar to "Angry Birds." Rovio said it isn't engaged in deal talks with Playtika, and said there was no assurance a deal would be reached.


Ericsson Warns of Slowing 5G Orders in North America

STOCKHOLM-Ericsson AB reported lower-than-expected quarterly profit and warned it faced an uncertain start to the new year as telecom operators in markets like the U.S. hold off placing new orders for 5G gear amid economic uncertainty.

The Swedish telecommunications-equipment company said Friday that the trend started to hurt its key networks unit in the fourth quarter and that it expects it to continue during the first half of 2023.


Elon Musk Sold Tesla Shares Before Company Acknowledged Weakness

Late last year, after a wave of news reports pointing to sagging demand for his company's vehicles, Tesla Inc. Chief Executive Elon Musk sold almost $3.6 billion of his shares in the electric-car maker.

On Jan. 2, Tesla announced fourth-quarter vehicle deliveries that were significantly below the company's most recent forecast to investors. The news sent Tesla's stock price plunging when markets opened the next day.


Evercore Promotes U.S. Advisory Executive to CFO Role

Investment banking firm Evercore Inc. appointed a company veteran from its U.S. advisory business as its new finance chief as it looks to expand in Europe and Asia and increase its technology investments.

The New York-based company on Friday said Tim LaLonde, its co-head of the U.S. advisory division and chief operating officer for the investment banking business, will take over as chief financial officer, effective March 6. Before joining Evercore in 2001, he served as an executive director at UBS Warburg, which is now part of financial-services giant UBS Group AG.


Crypto Lender Genesis Files for Bankruptcy, Ensnared by FTX Collapse

Cryptocurrency lender Genesis Global Holdco LLC and two of its lending subsidiaries filed for bankruptcy protection late Thursday night in New York, the latest domino to fall after the failure of crypto exchange FTX.

The bankruptcy marks the end of an era in which the lending of crypto assets fueled trades by both individual and institutional investors chasing high yields. A big drop in crypto prices that began in late 2021 led to the collapse of many companies that depended on that business model. Genesis held on longer than others. Crypto lenders Celsius Network LLC and Voyager Digital Ltd. filed for bankruptcy in July.


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