MARKET WRAPS
Watch For:
U. Michigan Preliminary Consumer Survey for June
Today's Top Headlines/Must Reads:
- Bank of Japan Keeps Ultralow Interest Rates Unchanged
- The Global Economy Looks Like It's Out of Sync
- Drilling Stocks Plunge on Bets for Oil Price Slump
- Micron, Blacklisted by Beijing, to Pump $600 Million Into China Expansion
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Opening Call:
Stock futures edged higher on Friday, continuing a stirring rally brought about by signs of cooling in both inflation and the jobs market.
"While the sum of the U.S. economic numbers overnight was mixed and did little to provide absolute clarity on the outlook for interest rates, the real story was the jobless claims number which continued to tick higher, suggesting a softening job market and a less hawkish Fed. Hence it took under 24 hours for traders to accord more weight to economic data, where jobs and inflation trends should provide the definitive steer to July's FOMC meeting rather than the Fed guidance," SPI Asset Management said.
Overseas stocks rose. Europe's Stoxx 600 index rose 0.4%. Hong Kong's Hang Seng Index rose 1.1% and the Shanghai Composite rose 0.6%, boosted by expectations for a major stimulus effort from the Chinese government.
Pre-Market Movers
Adobe posted fiscal second-quarter earnings that beat analysts' estimates and raised its fiscal-year outlook. The stock was up 3.4%.
Cava rose 2.9% after shares nearly doubled in value on Thursday.
Micron Technology gained 1% after saying it would commit another $602 million in its chip-packaging facility in the Chinese city of Xian.
Virgin Galactic rose 39% after it said its first commercial flight into space was scheduled for the end of the month.
Post-Close Movers
Cabot withdrew its earnings guidance for the fiscal year in response to a weaker demand environment. Shares fell 6.9%.
Clene said it is planning to sell shares of its common stock and accompanying warrants to purchase shares of common stock in an underwritten public offering. Shares dropped 21%.
Verastem said it intends to sell shares and pre-funded warrants in an underwritten public offering. Shares fell 7.6%.
Forex:
The dollar edged higher as investors continued to digest the Fed's rate signals.
Powell was "not as outspoken" in signalling further interest rate rises on Wednesday compared to the ECB's Lagarde on Thursday with upcoming decisions to depend on data, Commerzbank said.
The market only sees a 65% chance of a Fed rate rise in July, it said. "This might change though if the data surprises on the upside over the coming week."
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The euro should rise further as the European Central Bank looks set to keep interest rates higher for longer than the market expects, Commerzbank said.
The ECB is unlikely to lift rates in September but it will keep rates on hold for some time, compared to market forecasts for rate cuts next year, it said.
"Against this background we now feel even more comfortable with our projection of EUR/USD levels around 1.14 by year-end."
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Sterling held recent gains as the market maintained aggressive interest-rate rise expectations for the Bank of England, ING said.
Sterling's sensitivity to risk has fallen this year, suggesting it shouldn't be at the forefront of a rally in risky assets, but a softer dollar environment supports GBP/USD, ING added.
For EUR/GBP, however, the European Central Bank's "hawkish" meeting Thursday strengthens the 0.8550 support level, it said.
U.K. inflation data on June 21 will be the next big driver ahead of an expected 25 basis points rate rise by the BOE on June 22, ING said.
Energy:
Oil prices were flattish in Europe but holding onto gains from the previous session that came after China took steps to stimulate its economy, which is outweighing economic concerns elsewhere in the world, particularly in the U.S. after the Fed hinted it was not yet done raising rates.
"The fundamental picture remains robust, but bearish macro sentiment continues to dominate price action," BMI said.
Metals:
Base metals and gold prices were ticking higher in London, with hopes of a post-Covid stimulus being introduced in China helping to negate the current downturn in demand for industrial goods.
"We expect the Mainland Chinese government to announce some support measures for the property sector in the coming weeks," BMI, a Fitch Solutions subsidiary, said.
That support, BMI said, should boost prices for industrial metals, given the weakness in goods like copper which is down just under 8% from its peak of $9,365 a ton on January 23.
TODAY'S TOP HEADLINES
Bankrupt Vice Media in Sale Talks With Media Group GoDigital
Bankrupt media outlet Vice Media has found a bidder for its business that wants to chart a new course for the beleaguered company outside chapter 11 bankruptcy, according to people familiar with the deal talks.
Digital media conglomerate GoDigital is in advanced talks to buy all of Vice's assets including its core news business and female-focused Refinery29 at an upcoming bankruptcy auction, the people said. A bid could put GoDigital in competition with Fortress Investment Group and Soros Fund Management, lenders to Vice that have offered to swap outstanding debts for ownership of the business.
Disney Finance Chief Clashed With Top Executives Before Stepping Down
Walt Disney Co. Chief Financial Officer Christine McCarthy, who has been a key executive at the entertainment giant for more than two decades, is stepping down.
Disney said McCarthy is taking a family medical leave. McCarthy has an ailing husband, who has been in a healthcare facility since the start of the year.
AI Won't Kill the Music. Buy Universal and Warner Stock.
In April, a catchy new duet was uploaded to music-streaming services by an anonymous user. Listeners who tuned in heard Drake's voice pumping through their headphones, crooning, "I got my heart on my sleeve with a knife in my back. What's with that?" Fellow megastar The Weeknd seemed to agree with Drake's romantic struggles. His voice cried out, "I put her in the past."
The two Canadian singers may have been telling the truth about love, but their supposed collaboration wasn't technically real. Neither artist had contributed his voice to the song, called "Heart on My Sleeve." It was built with artificial intelligence, the software that's already remaking the tech and media world.
Forget What You Think You Know About Exchange Stocks
There probably aren't many people who hear the name "Nasdaq" and don't immediately think about stock trading. But sharp investors should know more than that.
Nasdaq this week announced its biggest acquisition ever, a $10.5 billion deal for financial technology provider Adenza, which provides software tools used by banks and brokerages for a variety of things, such as reporting regulatory data. Accounting for the deal, Nasdaq is projecting that it would derive less than a quarter of its revenue from its trading unit in 2023.
Raphael Bostic Discloses Violations of Fed Trading Rules in 2022
Federal Reserve Bank of Atlanta President Raphael Bostic disclosed personal investment transactions that took place just before a Fed policy meeting in May of last year when a ban on such activity for central bank officials was in place.
Nineteen trades of exchange-traded funds were made on May 2, 2022, according to Bostic's annual financial disclosure released Thursday by the Fed. The transaction amounts ranged from $1,001 to $50,000.
New Ports Contract Would Raise Pay 32%, Bring Dockworkers $70 Million in Bonuses
West Coast dockworkers won a 32% pay increase through 2028 and will get a one-time "hero bonus" for working through the pandemic under a tentative contract agreement reached with port employers, according to people familiar with negotiations.
The agreement announced late Wednesday, which must be ratified by employers and dockworkers, includes improvements in benefits and other provisions reached after more than a year of contentious negotiations that led some importers to divert shipments away from West Coast ports and led to fears of greater impact on U.S.-Asia trade flows.
Pay Could Be Seized From Failed Banks' Executives Under Senate Bill
WASHINGTON-Key Democratic and Republican senators have agreed to a bipartisan bill that would help regulators claw back the compensation of executives deemed responsible for a bank failure.
The deal between Senate Banking Committee Chair Sherrod Brown (D., Ohio) and South Carolina Sen. Tim Scott, the top Republican on the panel, comes after the failures of three midsize banks this year sent tremors through the industry. The collapses prompted calls from the White House and lawmakers in both parties for tougher punishments for executives at failed institutions.
'Mines Everywhere': Ukraine's Offensive Is Proving a Hard Slog
BLAHODATNE, Ukraine-A few miles south of this village, at the tip of the deepest advance of Ukraine's counteroffensive, a platoon from the Ukrainian 68th Jaeger Brigade fought at close range with Russian marines.
The Ukrainians took casualties from mortar and small-arms fire, but they inflicted more, and the Russians retreated.
Write to ina.kreutz@wsj.com TODAY IN CANADA
Earnings:
Canaccord Genuity 4Q
Economic Calendar (ET):
0830 Wholesale Trade
0830 International Security Transactions
Stocks to Watch:
Boston Pizza Fund Plans Normal Course Issuer Bid for Up to 400,000 Units
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Eupraxia Pharmaceuticals Announces Filing of Preliminary Base Shelf Prospectus; Filings With Provincial Regulators Will Allow Company and Certain of Its Securityholders to Qualify the Distribution of Up to C$200M of Securities
Expected Major Events for Friday
08:00/ITA: May CPI
08:30/UK: May Bank of England/Ipsos Inflation Attitudes Survey
08:30/UK: 1Q Bank of England statistics on UK banks' external claims
08:30/UK: Mar Card Spending statistics
(MORE TO FOLLOW) Dow Jones Newswires
06-16-23 0625ET
