MARKET WRAPS
Watch For:
Weekly Jobless Claims; Retail Sales for May; Industrial Production & Capacity Utilization for May; Canada Housing Starts for May
Today's Top Headlines/Must Reads:
- After Surging Early in the Year, Retail Spending Could Be Cooling
- Beijing Must Act to Avoid an 'L-Shaped' Future
- Saudi Arabia Sought to Push Oil Prices Higher. Markets Had Other Ideas.
- Food Producers Band Together in Face of Cyber Threats
Follow WSJ market coverage here
Opening Call:
Stock futures were softer on Thursday as traders continued to reflect on the Federal Reserve's monetary policy trajectory.
"The suggestion of another rise in addition to July took some wind from investors' sails...The overall conclusion that the fight against inflation remains live will likely rekindle concerns over the possibility of recession should the Fed overtighten, with the central bank very much keeping its options open," Interactive Investor said.
Further damping sentiment was news from China, where retail sales and industrial production data showed the world's second biggest economy continues to struggle in sustaining its post-Covid lockdown rebound.
The PBOC reacted by cutting its key policy rate for first time in nearly a year, but assets sensitive to perceptions of China demand, such as oil and copper, were still under pressure early Thursday.
Read China Cuts Rates to Prop Up Flagging Recovery
And traders will have to contend with more monetary policy action when the European Central Bank is expected at 8:15 a.m. Eastern to increase its key rate by a quarter-point, taking rates to 3.5%.
The ECB's Lagarde will start a press conference half an hour later and the market will be keen to see if she continues to warn of more tightening ahead.
Pre-Market Movers
Domino's Pizza gained 2.1% after being upgraded to Buy from Hold at Stifel and its price target raised to $350 from $320.
Lennar reported better-than-expected fiscal second-quarter earnings and revenue. The company said it sees fiscal third-quarter deliveries in a range from 17,750 to 18,250 homes, higher than forecasts. The stock was rising 2.2%.
ADRs of XPeng were up 2% after the company said it has received approval to launch its assisted-driving technology on major ring roads and expressways in Beijing.
Post-Close Movers
Ammo on Wednesday provided signs of an improved balance sheet amid reduced inventories and lower costs of revenue and total current liabilities. Shares climbed 8.3%.
Editas Medicine announced a secondary stock offering. Shares fell 5.8%.
Forex:
The dollar gained after the Fed's so-called "dot-plot" guidance showed most policymakers expect two more 25 basis-point rate increases this year.
The dot plot created a gap between the rate path expected by the market and the rate path expected by the Fed, Commerzbank said.
However, this gap is typical and the market is used to expecting more rapid rate cuts than the Fed, it added.
"That is why yesterday's FOMC decision was certainly not USD negative, but nor was it a game changer that would justify a complete revaluation of the [dollar]."
Read Dollar's Gains May Be Limited as End of Fed Rate Rises Looms
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A widely expected interest rate rise by the ECB is unlikely to move the euro much, but new inflation forecasts could have a major impact, Commerzbank said.
The headline inflation forecast for 2025 could be downwardly revised to the ECB's 2% target, unlike the Fed's projections on Wednesday that showed inflation remaining above 2% in 2025, Commerzbank said.
"This could argue for an end to interest rate hikes in the euro-area in the near future."
That would likely weigh heavily on the euro, particularly after the Fed signalled two further rate rises, Commerzbank said.
Read Euro Could Edge Lower as ECB Is Unlikely to Deliver Hawkish Surprise
Energy:
Crude oil prices inched higher in Europe, clawing back some of the post-Fed losses.
Peak Trading Research called the Fed move a "hawkish pause", saying oil remained under pressure.
"This puts a floor under the dollar, a headwind for our commodity markets."
Read Thermal Coal, LNG Prices May Be Near Bottom
Metals:
Base metals and gold fell more than 1% in London in reaction to the Fed indicating more rate hikes were possible this year.
"Industrial metals demand is expected to remain under pressure amid rising economic headwinds," ANZ Research said, also citing rising Treasury yields and the stronger dollar as headwinds.
TODAY'S TOP HEADLINES
Ticketmaster, SeatGeek to Show Ticket Buyers 'All-In' Pricing That Includes Fees
Two of the biggest U.S. ticket sellers plan to change how they display prices to concertgoers, the White House said Thursday, moves aimed at simplifying the process of buying tickets.
The Biden administration announced commitments by Live Nation and its Ticketmaster unit as well as SeatGeek to make pricing more transparent on their ticket-buying platforms later this year. Last year, President Biden urged for a crackdown on so-called "junk fees" that are tacked on to goods from concert and sporting event tickets to hotel stays and airline tickets.
Siemens to Boost Manufacturing Capacity With $2.17 Bln Investments
Siemens set out plans to invest 2 billion euros ($2.17 billion) to boost manufacturing capacity this year, pledging to develop a high-tech plant in Singapore and expand its digital factory in Chengdu, China, to tap growth opportunities in digitalization and automation.
The German industrial conglomerate said Thursday that it would pour around EUR200 million into its new Singapore facility, creating more than 400 jobs. The company will also invest EUR140 million to expand its digital factory in Chengdu, adding another 400 jobs.
Music Companies Sue Twitter for More Than $250 Million in Damages Over Alleged Copyright Violations
A group of music publishers representing songwriters from Taylor Swift to Beyoncé is suing Twitter for alleged copyright infringement, arguing that the platform benefits from the use of songs it hasn't paid for.
Twitter users regularly post videos that include popular music, and artists want to be paid when their work is used that way. The Elon Musk-owned company is one of the only social-media platforms that hasn't forged licensing arrangements governing the use of music on its service.
Russia's Big Economic Problem: Not Enough Workers
The war in Ukraine has fueled Russia's worst labor crunch in decades after hundreds of thousands of workers fled the country or were sent to the front lines, weakening the foundations of an economy weighed down by sanctions and international isolation.
Two waves of emigration last year, the largest since the collapse of the Soviet Union, and the mobilization of around 300,000 men have exacerbated an already tight labor market, plagued by long-term demographic decline. That has left Russian businesses short of everyone from programmers and engineers to welders and oil drillers, professions needed to boost the economy and support the war effort in Ukraine.
Miami Mayor Francis Suarez Joins 2024 GOP Presidential Nomination Race
Miami Mayor Francis Suarez, one of America's few Republican big-city mayors, on Wednesday entered the crowded race for the 2024 GOP presidential nomination.Suarez filed paperwork with the Federal Election Commission indicating his plans to run ahead of a speech Thursday evening at the Ronald Reagan Presidential Library in California.There will now be three Florida residents in the GOP contest. The two others, former President Donald Trump and Gov. Ron DeSantis, are the leading contenders in national polls.The mayor's entry makes him the only Latino so far in a field of Republican candidates, now double-digit in size, that is believed to be mostly formed.
Suarez, 45 years old and the first Miami-born mayor of his city, had pondered a presidential run for months and made visits earlier this year to the four states-Iowa, New Hampshire, South Carolina and Nevada-that will host the initial caucuses and primaries early next year.
Japan in Talks to Provide Artillery Shells to U.S. to Boost Stocks for Ukraine
TOKYO-Japan is in talks to provide artillery shells to the U.S. to bolster stocks for Ukraine's counteroffensive against Russia-a pivot for a country that has long curbed exports of lethal weapons.
A global hunt for artillery shells for Ukraine has intensified as Kyiv presses to regain territory in its southeast from Russian forces. The U.S. has sent more than two million 155mm artillery rounds to Ukraine since Russia's invasion began in February 2022, and Washington has been pressing its allies to contribute supplies.
Write to ina.kreutz@wsj.com TODAY IN CANADA
Earnings:
Nothing major scheduled
Economic Calendar (ET):
0815 May Housing Starts
0830 Apr Monthly Survey of Manufacturing
Stocks to Watch:
Northland Power Announces Pricing of $500M Inaugural Green Subordinated Notes
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RIV Capital 4Q Rev $1.8M; 4Q Loss/Shr 15C
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SILVERCORP ANNOUNCES HIGH-GRADE GOLD and SILVER DRILL RESULTS and the DISCOVERY of NEW LOW ANGLE GOLD VEINS at the LMW MINE; Hole ZKX1009 Intersected 18.0 Grams Per Tonne Gold, 32 G/t Silver, and 8.38% Copper Over a 1.11 Metre Interval of Vein LM29 at 1,028 M Elevation
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Vision Marine Technologies to Raise Approximately $2M; Agrees to Sell 493,828 Shrs for $4.05 Each; to Issue Warrant in Concurrent Private Placement
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Wall Financial 1Q EPS C$0.08; Wall Financial 1Q Rev C$32.5M
Expected Major Events for Thursday
04:30/JPN: Apr Tertiary Industry Index
04:30/JPN: Apr Revised Retail Sales
06:45/FRA: May CPI
12:15/CAN: May Housing Starts
12:30/CAN: Apr Monthly Survey of Manufacturing
12:30/US: Jun Empire State Manufacturing Survey
12:30/US: May Advance Monthly Sales for Retail & Food Services
12:30/US: May Import & Export Price Indexes
12:30/US: Jun Philadelphia Fed Business Outlook Survey
(MORE TO FOLLOW) Dow Jones Newswires
06-15-23 0616ET
