OPENING CALL
Stock futures retreated on Wednesday as investors awaited new inflation data.
The next inflation report due on Thursday, will give investors a chance to reassess the outlook of a first rate cut in June.
Bitcoin showed no signs of waning enthusiasm as the cryptocurrency recently topped $59,000 , reaching levels not seen in more than two years. A new crop of bitcoin exchange-traded funds were driving the rally.
Overseas Markets
Chinese indexes suffered another rough session. The Hang Seng fell 1.5%; the Shanghai Composite lost 1.9%, while the Nikkei 225 retreated slightly after Tuesday's record close.
Premarket Movers
Beyond Meat rose around 70% after it said that it would cut costs to boost its results, amid sliding sales.
Boston Beer guided for lower-than-expected earnings per share this year and said its CEO would retire. Shares were falling 13%.
Coinbase Global rose more than 7% amid ongoing Bitcoin fervor.
eBay was rising 3.5% after the company reported fourth-quarter earnings that beat analysts' estimates, boosted its quarterly dividend, and said it would be buying back an additional $2 billion of stock.
First Solar was rising 4.6% after the company said it expected net sales in 2024 of between $4.4 billion and $4.6 billion, and earnings of $13 to $14 a share.
Lemonade dropped 18% after it said it planned to "roughly double" its growth budget in 2024 and that the spending and the "resultant growth, should boost our bottom line a couple of years hence, but it will weigh on our bottom line in the coming quarters."
Nvidia fell 2%, following a small decline Tuesday. Last week, Nvidia's stock surged, pushing the chip maker's market value briefly above $2 trillion.
UnitedHealth Group shares fell in thin premarket trading after the Justice Department launched an antitrust investigation into the owner of the biggest U.S. health insurer.
Tuesday's Post-Close Movers
Agilent Technologies reported first-quarter adjusted earnings of $1.29 a share, beating estimates of $1.22. The stock rose 4.9%.
Progyny's guidance for the first quarter and full year 2024 came in shy of estimates. Shares fell 8.1%.
Urban Outfitters reported lower-than-expected earnings in the fourth quarter and said it expected comparable sales to moderate slightly this year. Shares dropped 9.9%.
Watch For:
2nd estimate GDP for 4Q; EIA Weekly Petroleum Status Report; Fed speakers include Raphael Bostic and John Williams; earnings from Royal Bank of Canada, Salesforce, HP Inc., Snowflake, Baidu, C3.ai, Monster Beverage, TJX Cos., Nutanix, Okta, Paramount Global, Pure Storage, Marathon Digital
Today's Top Headlines/Must Reads:
- 4 Ways to Lock In Yields Above 5%
- Are U.S. Stocks in a Bubble? History Says No
- The Fed Contrarian Who Saw the Soft Landing Coming
MARKET WRAPS
Forex:
The dollar is likely to stay supported now that "exuberance" over Fed monetary easing is over, J.P. Morgan said, adding it has the potential to rise over the medium-term as rate-cut expectations are scaled back.
Money markets price in three interest-rate cuts by the Fed for this year, according to Refinitiv.
EUR/GBP has had a whirlwind couple of weeks, currently trading back above the 0.85 mark, but it's expected to rise in the coming months, Danske Bank Research said.
Danske expects relative growth outlooks and broad central bank pricing to weigh on sterling against the euro going forward. It forecasts EUR/GBP to rise to 0.88 in six to 12 months, from 0.8560, though notes a possibility of the U.K. economy outperforming the euro area which could pose a risk to this call.
For now, EUR/GBP "seems caught around the 0.85 with lack of any meaningful directionality in the global investment environment," Danske said.
Energy:
Oil futures were down, as weaker demand in China and mixed supply and inventory data have weighed on prices this week, analysts said.
The discount on Russian crude oil has narrowed close to zero relative to Brent, mostly due to countries outside of the G7 coalition buying up more of the country's oil, according to estimates using the most recent customs data for December, Goldman Sachs said.
Meanwhile, news that OPEC+ might further extend their output cuts was offset by data pointing to increased U.S. crude stocks.
Metals:
Metals were weaker in early London trading, with the dollar regaining some lost ground ahead of the second estimate of the fourth quarter GDP growth rate and Thursday's PCE inflation print, IG Group said.
TODAY'S TOP HEADLINES
Tesla Stock Is Rising. Musk Reveals Timings for New Roadster Sports Car.
Tesla stock was rising in early trading Wednesday after CEO Elon Musk gave details of the much-delayed Roadster sports car.
The electric-vehicle maker's shares were up 0.1% to $200 in the premarket, while futures on the S&P 500 were down 0.1% and those on the Nasdaq Composite were up 0.2%.
OpenAI Moves to Dismiss New York Times Suit, Alleging 'Hack'
OpenAI moved to dismiss a lawsuit from the New York Times, alleging the company had paid someone to hack OpenAI's products to support the lawsuit.
The New York Times is suing OpenAI and Microsoft, a backer of OpenAI, for alleged copyright infringement. The newspaper has claimed that OpenAI used its content to create artificial intelligence tools and that these tools divert traffic from the Times website.
Hong Kong Takes Drastic Action to Avert Property Slump
Hong Kong has taken a bold step to ease a real-estate slump, scrapping a series of property taxes in an effort to turn around a market that is often seen as a proxy for the city's beleaguered economy.
The government has removed longstanding property taxes that were imposed on nonpermanent residents, those buying a second home, or people reselling a property within two years after buying, Financial Secretary Paul Chan said in his annual budget speech on Wednesday.
Shutdown Fears Fade After White House Meeting
WASHINGTON-Democratic and Republican congressional leaders struck an optimistic tone that they would avert a government shutdown this weekend after a White House meeting in which lawmakers also stepped up pressure on House Speaker Mike Johnson (R., La.) to allow a long-stalled vote on Ukraine aid to go forward.
Johnson is expected to put forward legislation in coming days that would keep the government fully open, but the details remained uncertain. The Congress has until Saturday at 12:01 a.m. to fund the departments of Veterans Affairs, Transportation, Agriculture, Energy and several other agencies that have been operating on temporary extensions since Sept. 30. The funding for the rest of the federal government expires after March 8.
U.S. to Limit Sales of Americans' Personal Data to China, Other Adversaries
WASHINGTON-President Biden is set to limit sales of some categories of sensitive U.S. data to China and other adversarial countries in a bid to stymie the covert flow of rich streams of Americans' personal information overseas.
Wednesday's action, administration officials said, is designed to counter a growing national security risk posed by the often-revealing data generated by mobile apps, smartwatches, car sensors and other ubiquitous digital devices. That data can be repurposed and weaponized as a means of intelligence collection by foreign spy agencies. In some cases, adversaries including China and Russia are leveraging these data sets to support hacking missions, espionage and blackmail, the officials said.
Republicans Confront Political Damage From Alabama IVF Ruling
Republicans are working to minimize the political fallout from an Alabama court ruling upholding the legal rights of embryos by reassuring voters they will protect access to in vitro fertilization treatments.
There are signs the damage will be difficult to undo. Democrats are stepping up their offensive on the issue, asserting that GOP lawmakers defending in vitro fertilization can't be trusted because many have also backed early abortion bans or legislation stating that life begins at fertilization.
Hunter Biden's Chinese Business Partners Keep Quiet in Impeachment Effort
House Republicans have summoned a succession of figures in their effort to impeach President Biden on the grounds that his family allegedly profited from his political clout. One after another has delivered largely exculpatory testimony, telling investigators the president was never involved in overseas deals that earned family members millions of dollars.
But missing from the Republicans' witness list are the Chinese business partners who funded some of the Bidens' most lucrative overseas deals. That has left lawmakers unable to glean deeper insight into why tycoons in China and elsewhere cozied up to the Bidens.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings [4Q unless stated otherwise]:
Baytex Energy
Capital Power
DRI Hlthcare Trust
ECN Capital
Enerflex
EQB 1Q
Fiera Capital
GDI Integrated
George Weston
Kinaxis
MDA
National Bank of Canada 1Q
Pason Systems
PHX Energy
Royal Bank of Canada 1Q
Spin Master
Stantec
SunOpta
Winpak
WSP Global
Economic Calendar (ET):
0830 Dec Payroll Employment, Earnings
0830 4Q Balance of Payments
Stocks to Watch:
5N Plus 4Q Rev $65.1M; 5N Plus 4Q Net $2.3M
Electra Battery Materials: Noteholders of Certain Convertible Notes Agreed to Postpone Unpaid Payment of Interest on the Notes Payable on Aug 15, 2023 and Feb 15, 2024; Electra Required to Make Payment of Accrued Interest on Aug. 15
Expected Major Events for Wednesday
00:01/UK: CBI Service Sector Survey
00:30/JPN: Jan Detailed Import & Export Statistics
05:00/JPN: Dec Indexes of Business Conditions - Revision
09:00/ITA: Feb Business Confidence Survey
09:00/ITA: Feb Consumer Confidence Survey
12:00/US: 02/23 MBA Weekly Mortgage Applications Survey
13:30/US: 4Q 2nd estimate GDP
(MORE TO FOLLOW) Dow Jones Newswires
02-28-24 0620ET
