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Today's Top Headlines/Must Reads
- Japan's Banks Get a Shot in the Arm
- China's Covid Easing and Policy Pivots Brighten Outlook for Stocks
- Huawei Says It Is Out of 'Crisis Mode' as Annual Revenue Stabilized
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Stock futures wilted on Friday, which would be a fitting end to a difficult year in which both stocks and bonds slumped as the Federal Reserve jacked up interest rates.
Ahead of the new year, there wasn't much new information for traders to act on, other than to ponder what's been a horrible year for investing as the Fed reacted to surging inflation.
The SIFMA trade organization is recommending an early close at 2 p.m. to the bond market.
Stocks to Watch
Apple was falling 0.7% after closing with a gain of 2.8% in the previous session following a report from WSJ that production for the more-expensive iPhone Pro models was beginning to catch up to demand.
The FDA "inappropriately" collaborated with Biogen before approving its Alzheimer's treatment Aduhelm in 2021, concluded a new report from House Democrats. The stock declined 1.2% in after-hours trading Thursday.
Coinbase fell 0.6% in premarket trading after rising 6.9% on Thursday.
Futu and Up Fintech tumbled more than 20% premarket, after China's securities regulator said the duo had conducted cross-border trading for Chinese domestic investors without its approval.
Heidrick & Struggles said it agreed to acquire Atreus, which is expected to occur early in the first quarter. Shares ticked up 1.5% in after-hours trading.
Merck's antiviral drug Molnupiravir was approved for emergency use by China's top drug regulator as the country experiences rising Covid-19 infections following the loosening of coronavirus restrictions. The stock was rising 0.2%.
Model Performance Acquisition said shareholders approved its reincorporation merger proposal, acquisition proposal, Nasdaq proposal and charter amendment proposal at a special meeting. Shares rose 2.5% in after-hours trading.
Palantir's stock fell more than 1% before the opening bell.
Sesen Bio said an amended merger agreement with Carisma Therapeutics will increase the one-time special cash dividend to be paid to its shareholders to $70 million from $25 million. Shares jumped 29% in after-hours trading.
Southwest Airlines was down slightly in premarket trading. The company said it was resuming its full flying schedule on Friday after canceling thousands of flights earlier in the week following a massive U.S. storm.
Read Barron's Southwest Prepares Normal Flight Schedule as Winter Chaos Abates
Tesla's shares rose 0.5% before the opening bell. Tesla is on pace to end 2022 as the worst performer among major S&P 500 stocks.
Forex:
The dollar was steady on the final trading day of 2022.
"The greenback staged strong gains in 2022 and is on track to log its best year since 2015, underpinned by the Fed's aggressive rate hiking path," Interactive Investor said.
Interest rate differentials boosted the dollar but punished other currencies, Interactive Investors added.
The DXY index peaked at 114.778 in late September, before dropping back on speculation that the Fed would start slowing the pace of interest-rate increases. Safe-haven flows due to Russia's invasion of Ukraine also lifted the dollar.
Energy:
Oil prices edged higher in Europe as low liquidity made for choppy markets.
2023 will start with traders looking for any clues on the shape of China's reopening while supply-side questions will focus on the health of Russia's energy exports.
Metals:
Base metals wavered amid low trading volumes as the year drew to a close.
With the exception of nickel, all base metals were set to end the year lower.
Copper was set for its first annual loss in four years, down almost 14% year to date as a stronger dollar and worries about recession risks have weighed on the metal.
Analysts expect China's reopening will likely be the key story for metals markets in 2023 as Beijing seeks to reopen the economy of the world's biggest consumer of raw materials without prompting a dramatic spike in Covid-19 cases.
TODAY'S TOP HEADLINES
China Approves Merck's Molnupiravir for Emergency Use, Regulator Says
China's top drug regulator said Friday that it approved Merck & Co.'s Molnupiravir for emergency use on Thursday, as the country grapples with waves of infections after Beijing abruptly reversed its stringent Covid-19 restrictions earlier this month.
The National Medical Products Administration said it is requiring the approval holder to continue relevant research, complete conditional requirements and submit follow-up research results in a timely manner, according to a statement posted on its website Friday.
Japan's Banks Get a Shot in the Arm
A 0.25 percentage point tweak to Japan's "yield curve control" interest-rate policy has lit a fire under the country's financial stocks. A sustained shift in monetary policy could add further fuel to the rally.
Shares of Japanese banks and insurers have surged since the Bank of Japan unexpectedly raised its effective cap on 10-year government bond yields to 0.5% from 0.25% about two weeks ago. The BOJ has long intervened in the bond market to keep yields of that tenor within a specific trading range around zero.
Huawei Says It Is Out of 'Crisis Mode' as Annual Revenue Stabilized
HONG KONG-Huawei Technologies Co. said it has exited "crisis mode" following punishing U.S. restrictions, as it reported growth in its telecom-infrastructure business and flat overall revenue for 2022.
"U.S. restrictions are now our new normal, and we're back to business as usual," said Eric Xu, Huawei's current chairman, in a New Year's message to employees.
Keystone Pipeline to Fully Restart After Oil Spill, Repairs
The operator of the Keystone oil pipeline said it was moving to fully reactivate the system, ending a weekslong outage that pressured U.S. oil prices and complicated some Gulf Coast refiners' operations.
TC Energy Corp. said Thursday that it had completed repairs, inspection and testing on the pipeline and that the system was now operational to all delivery points. It had said last week that it had received approval from the U.S. Pipeline and Hazardous Materials Safety Administration to restart a 300-mile branch linking Steele City, Neb., to the main U.S. oil storage hub in Cushing, Okla.
Talking Markets: China's Likely 2023 GDP Rebound Points to Opportunities in Consumer Sectors
China's economic growth in 2023 is likely to beat earlier expectations as several global investment banks raise their GDP forecasts, pointing to Beijing's aggressive push to reopen the country, and expect consumption-related sectors to offer opportunities in the hard-hit equities market.
Banks including Goldman Sachs, Morgan Stanley and J.P. Morgan have raised their estimates for China's GDP in recent weeks. They recommend clients look at the hospitality, consumer and banking sectors, which are expected to benefit from an economic rebound.
Talking Markets: Asian Currencies Set to Get a Boost From China's Reopening in 2023
A handful of Asian currencies stand to strengthen against the U.S. dollar on the back of continued reopening in China, which should lead to a recovery of the world's second-largest economy in 2023, analysts said.
China is exiting its zero-Covid-19 policy quicker than expected, and initial signs of disinflation in the U.S. emerged earlier than anticipated, Barclays foreign exchange analysts said in a recent research report. Just this week, China's National Health Commission said the country will remove all quarantine measures for Covid-19, including requirements for inbound visitors, from Jan. 8.
Biden Signs $1.65 Trillion Spending Bill Including Aid to Ukraine
CHRISTIANSTED, St. Croix-President Biden signed into law a $1.65 trillion spending bill that funds the federal government for the 2023 fiscal year and provides emergency aid for Ukraine.
Mr. Biden signed the bill, which passed Congress last week, while on vacation on the Caribbean island of St. Croix.
Cambodia Casino Fire Death Toll Rises to 25 as Search for Bodies Continues
POIPET, Cambodia-As the flames closed in, Ing Bunleng rushed to the closest window carrying a colleague's 6-year-old daughter in his arms. A fire was tearing through the casino hotel where he was employed as a bar manager. They needed to find a way down from the workers' dormitory on the third floor.
Looking out from the window, Mr. Ing saw a ladder rescuers had put up. He and the child scrambled down. The child's mother, who was working on a higher floor, is still missing.
American Spy Plane Has Uncomfortably Close Encounter with Chinese Jet Fighter
HONG KONG-The U.S. military said a Chinese jet fighter conducted an unsafe maneuver while intercepting an American spy plane in international airspace over the South China Sea last week.
During the Dec. 21 encounter, a J-11 fighter operated by a Chinese navy pilot flew "in front of and within 20 feet of the nose" of a U.S. Air Force RC-135, forcing the reconnaissance plane to "take evasive maneuvers to avoid a collision," the U.S. Indo-Pacific Command said Thursday.
Write to ina.kreutz@wsj.com TODAY IN CANADA
Earnings:
Nothing major scheduled
Economic Indicators (ET):
Nothing major scheduled
Stocks to Watch:
B2Gold Reports Two Fatalities From Off-Site Incident in Mali; All Reports Have Identified This Tragic Event as the Result of a Robbery Incident and Not Related to Any Terrorist Activity
Expected Major Events for Friday
06:00/RUS: Dec Russian Services PMI
07:00/UK: Dec Nationwide House Price Index
13:30/US: U.S. Weekly Export Sales
14:45/US: Dec Chicago Business Barometer - ISM-Chicago Business Survey - Chicago PMI
20:00/US: Nov Agricultural Prices
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12-30-22 0630ET
