MARKET WRAPS
Watch For:
Weekly Export Sales; Personal Income & Outlays for January; New Home Sales for January; Univ. of Michigan Final Consumer Survey for February; Speeches from Fed Governors Philip Jefferson and Christopher Waller, and regional presidents Loretta Mester, James Bullard and Susan Collins
Today's Top Headlines/Must Reads:
- Commerce Report to Detail Consumer Spending, Inflation in January
- Fed Rate Policy Is Shaking Up the World of Muni Debt
- Interest-Rate Concerns Push Investors Into Dividend-Paying Stocks
- Bank of Japan Governor Nominee Predicts Inflation Rate Will Fall Soon
- Ford Motor Turns to Industry Outsider to Reverse China Slump
- Justice Department Says Google Destroyed Evidence Related to Antitrust Lawsuit
- West Starts Issuing Fresh Sanctions Against Russia
Follow WSJ market coverage here
Opening Call:
Stock futures traded lower on Friday, as investors awaited key data on inflation for further clues on whether the Federal Reserve will have to keep lifting interest rates.
Overseas, incoming Bank of Japan governor Kazuo Ueda said it would be appropriate to continue easing - for now.
"Our colleagues in Tokyo judged that Ueda's key views on economic conditions, the inflation outlook, the current monetary policy stance and transmission mechanism all differed little from those of Kuroda. In order to avoid generating unwelcome market volatility, of course, that was probably Ueda's intention," Daiwa Europe said.
Stocks to Watch
Autodesk fell 2.5% issued earnings guidance for the fiscal first quarter below analysts' expectations.
Beyond Meat shares rose 14% premarket after the maker of plant-based meat alternatives reported a narrower quarterly loss.
Block said it expects to close 2023 with growth in adjusted underlying earnings. Shares rose more than 7% ahead of the opening bell.
Boeing declined 2.6% in premarket trading after the aerospace giant halted deliveries of its twin-aisle Dreamliner 787 jets because of a documentation issue.
Carvana reported a wider-than-expected quarterly loss and sales that missed analysts' estimates. Shares stood 3% lower premarket.
ContextLogic reported a 57% drop in fourth-quarter revenue and plans to reduce its workforce. Shares fell 12% in after-hours trading.
Nektar Therapeutics said it didn't meet the primary endpoints in a recent study of its rezpegaldesleukin in patients with systemic lupus erythematosus. Shares dropped 32% in after-hours trading.
Opendoor shares retreated 5.5% premarket after it posted its second consecutive quarter of losses.
Sweetgreen reported quarterly results and an outlook that were below expectations. Shares fell 8.5% premarket.
Warner Bros. reported fourth-quarter revenue slightly below expectations and the stock declined 5.1% in premarket trading.
SELLAS Life Sciences proposed an underwritten public offering of its stock. Shares dropped 34% in after-hours trading.
Forex:
The dollar strengthened and could be poised to rise further due to geopolitics "creeping into investment decisions" amid reports that China may increase its support for Russia, ING said.
"The fear of an escalation in U.S. sanctions may be prompting investors to re-appraise some of their investment holdings along geopolitical lines."
This comes at a time of seasonal strength for the dollar, which typically gains in February and March, ING said.
The DXY dollar index could continue to rise to 105.00 and possibly up to 105.60/106.00 if USD/CNH rises back up to 7.00 on geopolitics, ING added.
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Sterling rose as the U.K. economic outlook received a boost from data that showed a jump in consumer confidence in February, ING said.
GfK's consumer confidence index rose by seven points to -38 in February, the highest level since April 2022.
"At the margin, this will make the Bank of England's life harder as it seeks to cool aggregate demand to soften inflation," ING said.
Markets are now comfortable in pricing the BOE's rate at 4.50% at year-end, expecting 25 basis points rate rises in March and May, it added.
Read GBP/USD Could Stabilize as Implied Volatility Falls
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The euro fell against the dollar, mainly driven by higher U.S. interest rate expectations but also following worse-than-expected German economic growth data, MUFG Bank said.
The German economy contracted 0.4% quarter-on-quarter in the fourth quarter of 2022, according to final data.
"It will heighten concern that the cost of living squeeze is starting to have a bigger negative impact on households," MUFG said.
"While the German and other eurozone economies have held up better than feared over the winter period, the outlook for growth remains weak for the year ahead."
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EUR/USD seems to have entered a consolidation phase, based on technical charts, UOB's Global Economics & Research said.
On Wednesday, the currency pair fell below the key support level of 1.0615, invalidating UOB's view that EUR/USD is likely to break above 1.1120.
As such, the currency pair appears to have begun consolidation, and is expected to trade between 1.0300 and 1.0800 for the next couple of months, UOB added.
Read Dollar May Struggle to Rise Further Vs Euro
Bonds:
The case for higher terminal rates is clearer for the ECB than for the Fed, allowing Treasurys to outperform Bunds, Societe Generale said.
"The case for higher terminal rates is clearer for the ECB than elsewhere: we expect a further 125bp of hikes, and upside risks to wages could materialize," SG said.
Energy:
Oil prices rose ahead of a key gauge of inflation.
Despite the day's gains, oil remained lower for the month as a sharp build in U.S. stocks has weighed on prices.
"The market needs to chew through a lot of inventory before getting the green light to move back over $85.00 per barrel convincingly," SPI Asset Management said.
Metals:
Base metals traded mixed in early London trading, while gold edged higher, as investors awaited the PCE release.
TODAY'S TOP HEADLINES
Ford Motor Turns to Industry Outsider to Reverse China Slump
HONG KONG-Ford Motor Co. promoted Sam Wu to head its China business as the American auto maker struggles to reverse its dwindling market share in the world's biggest car market.
Mr. Wu, who joined Ford China as managing director from Whirlpool Corp. in October, takes over as president and chief executive on March 1, the Michigan-based auto maker said in a statement Thursday. In his new role, Mr. Wu will report to Ford CEO Jim Farley and replaces Anning Chen, who is due to retire in October.
Carvana Veers Clear of Junkyard-for Now
Used-car retailer Carvana resembles a once-sleek race car that has found itself in the middle of a demolition derby. The hits just keep coming.
Things were already looking scary for its investors after a grim third-quarter earnings call in November. Then its stock fell 43% to $3.85 following reports in December that implied the company could be steering toward a restructuring. Notably, The Wall Street Journal reported in early December that Carvana was working with its legal counsel to evaluate restructuring options and that its creditors signed cooperation agreements to ensure they work in unison if the company attempts to raise new debt. Since that scare, though, Carvana's stock had inexplicably gained 162% through Thursday's close, alongside other meme-stock favorites.
Justice Department Says Google Destroyed Evidence Related to Antitrust Lawsuit
WASHINGTON-The Justice Department said Google destroyed written records needed for an antitrust lawsuit that focuses on how the company preserved its dominance in internet search.
The government asked a federal judge Thursday to sanction Google for its past practice of setting employee chats to auto-delete, despite the company having told the court it would preserve records required for litigation. Google employees routinely discussed "substantive and sensitive business" using an instant-messaging product that was set to delete chats after 24 hours, the Justice Department said.
After Painful Slowdown, a Big Chinese Developer Is Preparing to Buy Land Again
Chinese property developer Country Garden Holdings Co. is planning to buy residential land in local government auctions for the first time in more than a year, a further sign that the downturn in the country's housing market is easing.
The company, one of the largest real-estate developers in China by contracted sales, was hit by a widespread slump in the sector last year that was marked by home sales declines, falling prices and a wave of international bond defaults among its peers.
Warner Bros. 4Q Results Weighed Down by Soft Ad Sales, Restructuring Costs
The advertising environment in the U.S. remains very challenging, Warner Bros. Discovery Inc. Chief Executive David Zaslav said as the entertainment conglomerate's fourth-quarter revenue came in below Wall Street expectations.
Speaking to analysts Thursday about the company's financial results, Mr. Zaslav said ad sales are continuing to be "very slow" in 2023. Mr. Zaslav said he is hopeful of a turnaround later in the year.
American Airlines Chairman Doug Parker Plans to Retire
Doug Parker, a deal maker who helped build American Airlines Group Inc. into the world's largest airline, is retiring from the carrier's board, closing a chapter in his decadeslong career in the industry.
Mr. Parker stepped down as American's chief executive last year, handing the reins to then-President Robert Isom. At the time, Mr. Parker said he would remain on as chairman for some period of time, but would have no executive duties.
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(MORE TO FOLLOW) Dow Jones Newswires
02-24-23 0635ET
