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Canada Retail Trade for September; Canada New Housing Price Index for October; Federal Reserve Bank of Cleveland President Loretta Mester speaks at Cleveland Fed Conversations on Central Banking: Wages and Inflation event; earnings from Best Buy, Dollar Tree, Autodesk

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Today's Headlines/Must Reads

- Crypto Lender Genesis Asks Binance and Apollo for Cash

- Walt Disney CFO, Others Brought Concerns to Board Over Bob Chapek

- Paramount Global Terminates Deal to Sell Publisher Simon & Schuster to Rival Penguin Random House

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Stock futures inched higher premarket on Tuesday as traders sought fresh range-breaking catalyst.

However, investors seemed reluctant to place bold bets as they weighed concerns about renewed Covid-19 restrictions in China and the prospects for tighter Federal Reserve policy.

Adding to the caution was a holiday-shortened week for Wall Street, where volumes traditionally tend to thin notably in the run up to Thanksgiving and Black Friday.

The lackluster action in stocks also reflects a market that has stalled following a rally off 2022 lows, and as investors look to the next catalyst to help push the S&P 500 out of its recent relatively tight range of roughly 50 points, on a closing basis, held over the past two weeks.

Global stocks were mixed: Hong Kong's Hang Seng fell more than 1%, while Japan's Nikkei 225 added 0.6%. In Europe the Euro Stoxx 600 ticked up 0.4%.

Stocks to Watch

Zoom Video shares fell 10% premarket after it said its online business continued to decline in the latest quarter.

Dell logged lower sales in the latest quarter but surpassed estimates as product revenue fell on changing consumer demand. Its shares fell 1% premarket.

Urban Outfitters beat Wall Street expectations for sales during the recent quarter, sending its shares up 2.2% off hours.

Agilent Technologies said it expects slightly higher revenue in its new fiscal year after reporting a double-digit increase in fourth-quarter sales. Its shares added 4.7% off hours.

Economic Insight

Global economic expansion is expected to slow in 2023 as financial conditions tighten and the upcoming winter aggravates China's Covid-19 outbreaks and Europe's natural gas problems, JPMorgan said.

The global economy isn't at imminent risk of sliding into recession, as adverse supply-side shocks are fading fast and this is reflected in a slide in global inflation toward 3.5% in early 2023, JPM said.

"We think it is a mistake to rule out a soft-landing scenario [20% probability] in which recession is avoided," JPM said.

In this scenario, sluggish growth and the removal of supply-side constraints are sufficient to push inflation down toward 2% without a sharp deterioration in labor markets.

Forex:

The dollar's recent downward correction is likely to be limited as the Fed remains one of the driving forces among central banks in raising interest rates, Commerzbank said.

Even if the Fed slows the pace of rate rises, the European Central Bank and other central banks are likely to follow suit, Commerzbank added.

"Sentiment towards the dollar is only likely to shift on a sustainable basis if we see clearer signs of a recession of the U.S. economy. At that point Fed rate cuts will be back on the agenda very quickly."

Read Central Banks Are Unlikely to Start Cutting Interest Rates in 2023

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The price of Bitcoin continued to slide in the wake of the FTX collapse, with further fears of contagion as crypto lender Genesis seeks to raise cash.

Bitcoin was down close to 2% over the past 24 hours, to below $15,700, adding to losses the previous day.

Beyond Bitcoin, the price of Ether was down more than 3% in the past 24 hours. Among smaller tokens, or altcoins, Solana and Dogecoin were down more than 2%.

Bonds:

The fed-funds futures curve and, in turn, Treasurys are realistically priced, Morgan Stanley Wealth Management said.

"Futures imply a peak rate of nearly 5% around April or May, coinciding with expectations for core inflation as forecast by inflation swaps."

This pricing provides a cushion for bond buyers, as Morgan Stanley has a "dovish" view of the fed-funds terminal rate of 4.625% in February.

Fixed Income Outlook

Fixed-income assets will prove more attractive as monetary-policy tightening likely to slow in 2023, according to Credit Suisse's latest investment outlook.

CS sees recessions in the eurozone and U.K. and a slump in growth in the U.S. and China in 2023 after a 2022 that saw aggressive rate hikes from central banks and slowing economic growth. But with inflation likely to normalize in 2023, and interest-rate cuts unlikely, fixed-income assets should become more attractive to hold and offer renewed diversification benefits in portfolios.

Long U.S. vs eurozone duration government bonds, emerging-market currency debt and investment-grade credit should offer interesting opportunities in 2023, CS said.

Read Contribution of Core Bonds to Portfolio Returns Expected to Rise in 2023

Energy:

Crude oil prices pushed higher in Europe after a volatile session on Monday and Peak Trading Research said that further volatility on low volumes would be likely ahead of Thanksgiving.

"The next few trading sessions are a Thanksgiving countdown. It's an exceptionally light data week. Traders are watching price action in crude oil, China's rising Covid cases," Peak said.

Metals:

Base metals were mixed and gold higher, with a lack of macro data points this week set to drive prices.

"It is looking increasingly likely the [Fed] will increase the funds rate by 50 basis points next month, compared with the 75 basis-point increases delivered in the past four meetings," Commonwealth Bank of Australia said.

A slower rate of hikes would be bullish for risk assets such as metals, as investors steer clear of the dollar.

Gold Outlook

The appetite for gold should improve as interest rates rise, with equities becoming less attractive to investors, Credit Suisse said.

In early 2023, demand for cyclical commodities whose prices change based on the wider economy may be soft, but as central banks leave rates at a higher level, the backdrop for gold should improve, CS said.


TODAY'S TOP HEADLINES


Crypto Lender Genesis Asks Binance and Apollo for Cash

Cryptocurrency firm Genesis Global Capital is still trying to raise cash.

The lender has approached crypto exchange Binance for an investment and to bid for its loan book, according to people familiar with the matter.


Walt Disney CFO, Others Brought Concerns to Board Over Bob Chapek

Behind the surprise change in leadership at Walt Disney Co. on Sunday was festering discontent among investors and top executives including Chief Financial Officer Christine McCarthy, who in recent weeks had expressed to directors her lack of confidence in Chief Executive Bob Chapek, according to people familiar with the matter.

Disney executives and investors had been complaining for months to the prior CEO, Robert Iger, about the direction of the company under Mr. Chapek, according to people familiar with the matter. Mr. Iger advised some of these executives to take their concerns to the company's board, some people familiar with the matter said.


Robert Iger's Return to Disney Has Many Fans Overjoyed

To many members of Disney's ardent fan base, Robert Iger's return to the company's helm is a storybook ending to a drawn-out corporate saga.

Fans of the company's theme parks and film franchises flocked to social media to celebrate the news when the Walt Disney Co. announced Sunday that Mr. Iger would return to the chief executive role he held for roughly 15 years. Disney fans scrutinize not only changes to its entertainment offerings, but also its boardroom moves and quarterly earnings.


Paramount Global Terminates Deal to Sell Publisher Simon & Schuster to Rival Penguin Random House

Paramount Global, which owns the Simon & Schuster book-publishing unit, said in a federal filing Monday that it has terminated its agreement to sell Simon & Schuster to rival Penguin Random House.

Paramount said that Simon & Schuster "remains a non-core asset" and that the publisher "does not fit strategically within Paramount's broader portfolio," suggesting Simon & Schuster eventually will go back on the sales block.


Bertelsmann Won't Appeal U.S. Ruling Against Simon & Schuster Takeover

Bertelsmann SE said late Monday that it wouldn't appeal against the court ruling that blocked the planned takeover of Simon & Schuster by its book-publishing subsidiary Penguin Random House.

Simon & Schuster's parent Paramount Global on Monday said it had terminated the $2.18 billion deal to sell the unit to its rival, which was blocked on Oct. 31 by a U.S. judge on competition grounds.


Dell stock swings to a loss after weak forecast overshadows earnings beat

Dell Technologies Inc. shares swung to a loss in the extended session Monday after the computer maker forecast a revenue shortfall that overshadowed quarterly results that topped Wall Street estimates.

Dell DELL shares, which had earlier rallied as much as 7% after hours when quarterly results were first released, swung to a loss of more than 2% after the company gave its forecast on a conference call. Shares closed down 2.3% in the regular session at $41.07. Year-to-date, Dell shares are down 27%, compared with a 17% fall by the S&P 500 index SPX and a 30% drop by the tech-heavy Nasdaq Composite Index COMP.


Railroad Unions Split Over Labor Contract

One of the country's largest railroad unions said Monday that its members voted to reject a new wage deal brokered by the White House, splitting with another large union and moving closer to a labor strike as soon as early December.

(MORE TO FOLLOW) Dow Jones Newswires

11-22-22 0537ET