MARKET WRAPS
Watch For:
Challenger Job-Cut Report for May; ADP National Employment Report for May; Weekly Jobless Claims; April Factory Orders; EIA Weekly Natural Gas Storage Report; EIA Weekly Petroleum Status Report; Canada Building Permits for April
Opening Call:
Stock futures rose modestly Thursday, following declines in the previous session that came after strong U.S. economic data--particularly for manufacturing activity and job openings--reignited worries that the Federal Reserve would remain aggressive in its fight to cool historically high inflation.
The Federal Reserve also officially began shrinking its nearly $9 trillion balance sheet on Wednesday.
"The U.S. economy is still looking pretty good and that means the Fed may need to stick with the half-point rate hike pace beyond the summer," said Edward Moya, an analyst at Oanda.
"Everyone expects economic activity to soften over the next couple of months, especially since inflation risks remain elevated and now that the Fed has begun shrinking its $8.9 trillion dollar balance sheet," he added.
Forex:
U.S. jobs data, including Thursday's ADP private payrolls and Friday's monthly nonfarm payrolls figures, are unlikely to give the dollar direction, Commerzbank said.
The Federal Reserve is already taking large and decisive rate steps against the risks of inflation and "a rise or fall in the unemployment rate by one tenth is not going to make any difference to the Fed's current approach," Commerzbank added.
Energy:
Oil futures fell in Europe, with the market expecting supply to rise following the OPEC meeting later today.
OPEC's 13 members and 10 non-OPEC producers led by Russia will be meeting and are expected to approve a planned increase of 432,000 barrels a day.
Despite the expected increase in supply from the group, oil prices are already sitting at a very high level and analysts are skeptical that OPEC will be able to fill the gap left by Russian oil.
"We can't see OPEC being able to fill the gap considering it has struggled to lift output over the past few months. This comes as China starts to ease restrictions as Covid-19 cases fall. This will leave the market extremely tight," said ANZ.
Metals:
Gold prices moved higher as investors continue to seek safe-haven assets amid rising inflation rates.
"Despite the specter of further rate hikes, rising inflation and an uncertain economic outlook continues to support investor demand," ANZ Research said.
With oil prices falling ahead of the OPEC meeting later today, this has helped to ease the pressure on gold and add pressure to the dollar in terms of their roles as inflation hedges, with the latter having been the preferred for investors in recent weeks.
TODAY'S TOP HEADLINES
GameStop Sales Climb as Loss Widens
GameStop Corp. sales rose as more people returned to its stores last quarter, but its loss widened, damping investors' hopes for signs of a turnaround for the videogame retailer.
The Grapevine, Texas-based company posted on Wednesday $1.38 billion in net sales for the quarter through April 30, up from $1.28 billion a year earlier. On an adjusted basis, the retailer reported a loss of $2.08 a share, compared with a loss of 45 cents a share over the same period a year ago. Three analysts polled by FactSet expected net sales of $1.32 billion and an adjusted loss of $1.45 a share.
NASA Selects Axiom, Collins Aerospace for Space-Suit Contract
NASA chose Axiom Space Inc. and Collins Aerospace to provide it with new astronaut suits, as the agency pushes to replace decades-old hardware and spur more commercial activity in space.
Chinese Developers Jiayuan, Central China Real Estate Rise
Shares of two Chinese property developers rose Thursday morning after they announced fundraising plans to pare down debt.
Hong Kong-listed Jiayuan International Group Ltd. gained 10% to HK$0.39, while Central China Real Estate Ltd. advanced 17% to HK$0.76. Jiayuan shares are still down 85% for the year, whereas Central China Real Estate has lost 19%.
Biden Says No Short-Term Fix to High Energy, Grocery Prices
WASHINGTON-President Biden warned there was little the administration can do in the short term to lower high energy and food prices as the White House struggles to contain the fallout of sky-high inflation.
Soaring prices have become a major liability for the president and Democratic Party as they seek to bolster their standing with voters ahead of November's midterm elections.
China to Increase Loan Quotas for Policy Banks to Fund Infrastructure
China's State Council said it would increase loan quotas for state policy banks by 800 billion yuan ($120 billion) to fund infrastructure projects, as the world's second-largest economy faces intense downward pressure due to stringent measures to prevent Covid-19.
In a regular meeting chaired by Premier Li Keqiang, the State Council said the government also will offer temporary subsidies and aid to migrant workers, many of whom have lost jobs during the Covid outbreaks and lockdowns.
Black Sea Grain Talks Gain Steam as Russia, Turkey Eye Cooperation
An effort to ship grain stranded by the Russia-Ukraine war showed progress Wednesday, as a top Russian official blessed Turkey's role in removing mines from the Black Sea and a top U.S. official said Washington was working to keep sanctions from blocking Russia's exports.
United Nations Secretary-General António Guterres has been leading discussions to find a way to ship grain and sunflower oil that has been blockaded in Ukrainian ports on the Black Sea-and to get Russian grain and fertilizer to world markets.
BOJ Board Member Adachi Rejects Tightening Speculation
Bank of Japan policy board member Seiji Adachi rejected some speculation in the markets that the bank may follow other global central banks in tightening monetary policy to avoid further falls in the yen.
"If the bank uses monetary policy to respond to short-term fluctuations [in the foreign exchange market] before achieving its goal for underlying inflation, it would bring negative effects on the Japanese economy," Mr. Adachi said in a speech on Thursday.
China Warns New Zealand Against Squandering Trade Relationship
WELLINGTON, New Zealand-China's top diplomat in New Zealand warned that the South Pacific country risked squandering close trade ties as Wellington increasingly sides with the U.S. and Australia in trying to limit Beijing's influence in the region.
Wang Xialong, China's ambassador to New Zealand, told the New Zealand China Council that an economic relationship in which China buys nearly a third of the country's exports shouldn't be taken for granted. His speech came a day after a joint statement by New Zealand and the U.S. following a meeting between Prime Minister Jacinda Ardern and President Biden drew a rebuke from Beijing.
Gunman Kills at Least Four People in Shooting at Tulsa Medical Clinic
A gunman killed at least four people Wednesday before dying of a gunshot wound himself in a mass shooting at a medical clinic in Tulsa, Okla., according to police.
Tulsa police said in a briefing that they responded within three minutes to reports at 4:52 p.m. of a man with a rifle in the Natalie Medical Building at St. Francis Hospital. Officers rushed to the second floor when they heard gunshots and found people shot in an orthopedic office, Deputy Chief Eric Dalgleish said in a briefing.
Biden to Cancel All Student Debt From Defunct Corinthian Colleges
The Biden administration said Wednesday it would forgive all of the loans outstanding held by students who attended Corinthian Colleges, which at $5.8 billion amounts to the largest single action of debt cancellation ever by the federal government.
The Education Department estimated that 560,000 student borrowers would be affected by the move involving the defunct, for-profit education company.
Write to hoishan.chan@dowjones.com TODAY IN CANADA
Earnings:
Canaccord Genuity Group 4Q Voyager Digital 4Q
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Economic Indicators (ET):
0830 April Building Permits
Expected Major Events for Thursday
10:00/FRA: Apr OECD CPI
11:30/US: May Challenger Job-Cut Report
12:15/US: May ADP National Employment Report
12:30/CAN: Apr Building permits
12:30/US: 05/28 Unemployment Insurance Weekly Claims Report - Initial Claims
12:30/US: 1Q Revised Productivity & Costs
13:00/RUS: Weekly International Reserves
14:00/US: Apr Manufacturers' Shipments, Inventories & Orders (M3)
14:30/US: 05/27 EIA Weekly Natural Gas Storage Report
15:00/US: 05/27 EIA Weekly Petroleum Status Report
16:00/US: May Monthly U.S. Retail Chain Store Sales Index
20:30/US: Foreign Central Bank Holdings
20:30/US: Federal Discount Window Borrowings
23:01/UK: May BRC-Sensormatic IQ Footfall Monitor
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Thursday
Armstrong Flooring Inc (AFIIQ) is expected to report $-0.26 for 1Q.
Asana Inc (ASAN) is expected to report for 1Q.
Bit Digital Inc (BTBT) is expected to report for 1Q.
Buckle Inc (BKE) is expected to report.
Calavo Growers (CVGW) is expected to report $0.22 for 2Q.
Canaccord Genuity Group (CF.T) is expected to report $0.41 for 4Q.
Ciena Corp (CIEN) is expected to report $0.40 for 2Q.
ClearSign Technologies Corp (CLIR) is expected to report for 1Q.
Cooper Companies Inc (COO) is expected to report $2.84 for 2Q.
Costco Wholesale Corp (COST) is expected to report.
CrowdStrike Holdings Inc (CRWD) is expected to report for 1Q.
Designer Brands Inc (DBI) is expected to report for 1Q.
Duckhorn Portfolio Inc (NAPA) is expected to report for 3Q.
Duluth Holdings Inc (DLTH) is expected to report $-0.03 for 1Q.
HashiCorp Inc (HCP) is expected to report for 1Q.
Hormel Foods Corp (HRL) is expected to report $0.47 for 2Q.
IDT Corp (IDT) is expected to report for 3Q.
(MORE TO FOLLOW) Dow Jones Newswires
06-02-22 0537ET
