MARKET WRAPS

Watch For:

Canada Trade for September; U.S. Trade for September; U.S. 3Q Preliminary Productivity & Costs; U.S. Weekly Jobless Claims; Uber Technologies Inc. 3Q Results.

Opening Call:

Stock futures edged higher ahead of another spate of earnings and fresh economic data.

A strong earnings season so far has shown strong demand for companies' products and services, curtailing worries that higher prices could reduce Americans' spending.

Companies including Moderna, ViacomCBS and Kellogg are set to report quarterly results before the opening bell. Airbnb, Square, Uber Technologies and Peloton Interactive are slated to post earnings after markets close.

Retail trader favorite Bed Bath & Beyond saw shares add 2.9% in premarket trading, building on Wednesday's jump as individual investors' appetite for risk taking grows. Shares of Express and Naked Brand Group, stocks that benefited earlier this year from a surge in individual investing, each rose less than 2% premarket.

Even with the reduction in the Fed's pandemic-driven stimulus, investors say the bond-buying program and low interest rates will support stocks. Fed Chairman Jerome Powell played down the prospect of an imminent turn to raising interest rates Wednesday.

"This liquidity being pumped into the market is the single most powerful force on earth," said Hani Redha, a portfolio manager at PineBridge Investments. "And yes, yesterday we got an announcement that the force is going to get weaker but even then you still have this force that is lifting the market."

Fresh figures on the number of Americans who applied for first-time unemployment benefits in the week ended Oct. 30 are due out at 8:30 a.m. ET. Claims have fallen over the past few weeks as the labor market has tightened.

Overseas, the pan-continental Stoxx Europe 600 rose 0.5%. Société Générale shares rose 2.6% in Paris trading after the bank posted profit ahead of expectations and replaced its chief financial officer, as it prepares to launch a buyback program. Commerzbank shares added more than 6% in German trading after posting results that beat analysts' estimates.

Investors are watching to see if the Bank of England nudges up interest rates when it releases its policy statement at 8 a.m. ET. Speculation over the possibility of its first rate increase in three years has intensified in recent weeks after Gov. Andrew Bailey warned on Oct. 17 that the central bank "will have to act" if surging prices for goods and energy push up Britons' expectations of future inflation.

Forex:

The dollar rose after the Fed announced plans to taper asset purchases, as expected, but offered few clues on prospects for interest rates rising, only that the central bank would stay flexible. This leaves focus on upcoming data, including monthly non-farm payrolls data Friday.

With recent signs of a strong U.S. economy, the dollar could be poised to rise, said ING. "The story of how pent-up demand releases itself over coming months and quarters should be a positive one for the dollar," it said.

Meanwhile the Fed has started policy normalization which should eventually lead to tighter dollar liquidity, higher U.S. rates and a stronger dollar, ING said.

Bonds:

In bond markets, the yield on the 10-year Treasury note ticked up to 1.579% Thursday from 1.577% Wednesday.

The Fed's clear communication has a calming effect on the capital markets, with bond and currency markets unchanged immediately after Wednesday's statements and stock markets reacting positively, said AXA Investment Managers.

"The U.S. central bank communication is almost exactly in line with our assessment," said Achim Stranz, chief investment officer at AXA IM Germany. AXA IM sticks to its policy of overweighting equities against the backdrop of positive corporate earnings reports, while it prefers a rather more defensive short duration in fixed-income securities, he said.

Eurozone government bond yields dropped, led by Italy, after the Fed announcement. Signals that the Fed isn't in hurry to raise interest rates might spark the market to scale back expectations of an early interest rate rise by the European Central Bank, too, still priced for late 2022, analysts said.

Commodities:

Oil prices rebounded in early European action ahead of the OPEC+ meeting later, although analysts expect no change to the cartel's production increases.

After bearish API data late Tuesday, the EIA released similarly downbeat crude inventory data. Similarly, talks between Iran and Western nations are set to resume at the end of the month, with "the prospect, however remote, of a rush of Iranian crude" prompting a selloff in oil markets, said Oanda's Jeffrey Halley.

Gold prices gained in European trade. Gold's initial Wednesday "selloff occurred prior to the Fed statement and we deduced from this that traders were expecting a much more hawkish statement than what they eventually got," said Ed Meir, a metals consultant at ED&F Man.

TODAY'S TOP HEADLINES

Credit Suisse Revamps Business in Post-Archegos Overhaul

Credit Suisse Group AG said it would exit most hedge-fund financing and restructure its sprawling operations after deep financial losses and regulatory penalties.

The Swiss bank said Thursday its central mission will be catering to the world's rich with private banking and wealth management. That flagship business, currently managed across geographic units, will sit under one roof and invest for growth with new hires and a target to boost assets to around $1.2 trillion by 2024, from under $1 trillion now.

Google to Pursue Pentagon Cloud-Computing Contract

Google is pursuing a massive cloud-computing contract with the Department of Defense, nearly three years after abandoning a similar bid process in the face of employee protests.

The head of the Alphabet Inc. subsidiary's cloud division, Thomas Kurian, met this week with Pentagon officials to discuss the bid process for a contract called the Joint Warfighting Cloud Capability, according to people familiar with the meeting.

Deere Says It's Done Bargaining After Striking Workers Reject Second Contract Offer

Deere & Co. won't raise its offer to striking workers after a second vote to ratify a new contract failed Tuesday, a company executive said.

Marc Howze, the chief administrative officer for the farm and construction equipment manufacturer, said the company made its best and final offer in a six-year proposed contract that members of the United Auto Workers union voted down by a margin of 55% to 45%.

MGM Plans to Sell Mirage Operations in Las Vegas

MGM Resorts International said it would sell its operations of The Mirage to another operator, part of a rash of deals that are changing the hands of ownership on the Las Vegas Strip.

MGM Resorts, like other casino and hotel operators, has been shedding some of its assets including its real-estate holdings to focus on new business areas such as sports betting, entertainment and a casino development in Japan.

Qualcomm Posts Record Sales Amid Surging Demand for 5G Smartphones

Qualcomm Inc. posted record quarterly sales and forecast further growth amid surging demand for 5G smartphones in the face of supply-chain constraints.

Chief Executive Cristiano Amon, who took the top job in June, said steps the company has taken to assure parts supplies are starting to deliver results and should ease bottlenecks over the coming months.

At MetLife, Life Insurance Claims Rise for Younger People Dying From Covid-19

Covid-19 cut into third-quarter results at MetLife Inc. as deaths linked to the Delta variant increased for people in their working years.

It was one of the costliest quarters since the pandemic began for the insurer's big business of providing employer-sponsored life insurance.

Jobless Claims Likely Extended Drop Toward Levels Seen Before Covid-19

Worker filings for unemployment benefits likely extended their downward march last week as they began to approach levels last seen before the Covid-19 pandemic, economists say.

Economists surveyed by The Wall Street Journal estimate that the Labor Department will report Thursday that initial jobless claims, a proxy for layoffs, decreased to 275,000 during the week ended Oct. 30 from 281,000 in the previous week.

Inflation Debate Hangs Over Stock Market's Record Run

Some traders stuck with wagers on stubbornly high inflation after Wednesday's Federal Reserve meeting, underlining a divergence in expectations between segments of the bond market and the U.S. central bank.

Stocks climbed to fresh records after Fed Chairman Jerome Powell's press conference assured investors the central bank wouldn't be overly aggressive with rate hikes, even as it laid out plans to end bond purchases by June. Mr. Powell said that the central bank believes inflation will dip by the second or third quarter of next year, as businesses increase the production of goods and supply-chain snarls ease.

Norges Bank Keeps Rate at 0.25%, Still Sees December Hike

Norway's central bank on Thursday kept its key policy rate unchanged at 0.25%, as expected, and reiterated that a further hike is likely later this year.

In September, Norges Bank became the first major western central bank to raise interest rates since the onset of the Covid-19 pandemic, when it lifted its key rate to 0.25% from zero while suggesting a further raise would come in December.

German Manufacturing Orders Rebounded in September

German manufacturing orders rose in September, swinging from a sharp fall registered in August, amid continuing supply-chain disruptions that curtail factory activity.

Manufacturing orders increased 1.3% on month in September in adjusted terms, following a revised 8.8% fall in August, according to data from federal statistics office Destatis released Thursday.

Options Activity Tied to Avis, Meme Stocks Explodes

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11-04-21 0614ET