North American Morning Briefing: Stock Futures Steady as Earnings Season Ramps Up

MARKET WRAPS

Forex:

Danske Bank Research remains positive on the outlook for the dollar.

"We anticipate the potential for a dollar rally in 1Q, given the ongoing trend of scaling back rate cut expectations among G10 central banks, which could lead to general risk-off sentiment in markets."

The dollar has had a strong start to the year, emerging as the best performer in the G10 space, and negative economic data surprises outside the U.S., such as the recent weak data from China, could act as potential catalysts for a dollar rally, it said.

Danske forecast EUR/USD at around 1.05 on a 12-month horizon.

The euro rose to a one-week high against the dollar, helped by improved risk appetite on reports that China is considering a large stimulus package to support struggling stock markets, ING said.

Whether the euro's gains continue will depend on whether equities continue to rise, it said.

"The direction of travel today for the pair will mostly be a consequence of whether Western stock indices will be able to keep the positive mood shown by Asian equities and FX."

The yen gaine against the dollar after the Bank of Japan left its policy unchanged , helped by comments from Governor Kazuo Ueda indicating that the BOJ is moving closer to raising rates, MUFG said.

However, sustained yen strengthening looks unlikely for now, MUFG added, noting that Ueda refrained from indicating the exact timing of an exit from negative rates while uncertainty remains over how widespread wage hikes will be.

"While we expect the BOJ's exit from negative rates to encourage a stronger yen...recent price action has highlighted that it is still likely premature to expect the yen to strengthen on a more sustained basis."

Energy:

Crude prices edged higher following fresh attacks by the U.S. and the U.K. against Houthi sites in Yemen and Ukraine's drone attack on a Russian fuel terminal in the Baltic Sea over the weekend.

Metals:

Base metals prices rose on improved sentiment following the Bloomberg report that Chinese authorities are considering a package of measures to stabilize the stock market.

Top metals consumer China "will remain key in driving the general trend of the whole complex, most likely resulting in rangebound moves," Sucden Financial said.

Meanwhile, gold edged higher as the dollar softened while investors awaited economic data and central bank decisions.

Battery Metals

Wood Mackenzie forecast a glut of lithium, cobalt, nickel and graphite to continue for several years.

It said automakers are likely sitting on large stockpiles of battery cells for EV sales that failed to materialize.

Citing the China Automotive Battery Innovation Alliance, Wood Mackenzie said only 387 GWh of the 747 GWh of power batteries produced in China in 2023 were installed into products.

"With storing batteries being an expensive business, automakers may have a more cautious appetite for purchasing cells in 2024."

TODAY'S TOP HEADLINES

Microsoft Balances SEC Disclosure Rules After Email Hack

Microsoft's regulatory disclosure Friday of a cyberattack on senior executives' email accounts shows the interpretation of materiality is expanding under new federal cybersecurity rules.

Companies are used to evaluating the financial or operational blow from situations such a factory shutdown or an executive departure. Now to satisfy new mandates from the Securities and Exchange Commission, companies must try to assess the latent business impact of cybercrime.

Why It Makes Sense for New EV Drivers to Look Beyond Tesla

For consumers, it makes a lot of sense to lease an electric vehicle instead of buying one. For the companies on the other side of the trade, not so much.

A full 59% of the EVs sold through U.S. dealerships in December were leased rather than bought outright, according to the data provider Edmunds-the highest share in three years. Importantly, that calculation excludes the market leader Tesla, which sells directly to consumers. Its leasing share is at the other end of the spectrum: It fell to 2% of deliveries in the fourth quarter, the lowest in at least four years.

Desperate Chinese Property Developers Resort to Bizarre Marketing Tactics

China's real-estate crisis has dragged down the economy, caused massive layoffs and pushed multibillion-dollar companies to the point of collapse.

Economists think it's about to get worse.

In New Hampshire, Underdog Haley Tries to Block Trump's Path to GOP Nomination

CONCORD, N.H.-A Republican primary electorate heavy with independent voters will deliver a verdict Tuesday on whether Nikki Haley's long-shot bid to slow Donald Trump's march to the party's 2024 presidential nomination can find any traction in the snow of New Hampshire.

Haley, a former South Carolina governor and United Nations ambassador, engaged in a frantic burst of final campaigning Monday ahead of what is likely her best chance to alter the narrative that the former president is the inevitable nominee.

Israeli Military Suffers Deadliest Day Since Gaza War Began

TEL AVIV-The Israeli military said at least 21 soldiers were killed when two buildings rigged for demolition in Gaza collapsed after militants fired at a nearby tank, by far the deadliest incident for Israel in the enclave since the start of the war.

The blast from the rocket-propelled grenade on Monday likely caused the explosives to detonate, collapsing the buildings, the military said.

Write to ina.kreutz@wsj.com

TODAY IN CANADA

Earnings:

Canadian National Railway 4Q

Economic Indicators (ET):

Nothing scheduled

Stocks to Watch:

Alimentation Couche-Tard Prices C$500M Notes Offering; Notes Carry 4.603% Coupon, Mature Jan 2029; Intends to Use Proceeds for Debt Payments; Indebtedness Was Used for Acquisition of European Retail Assets From TotalEnergies; Notes Being Offered via Syndicate Consisting of National Bank Financial, Desjardins Securities , RBC Dominion Securities, Among Others; Notes Given BBB+ Rating by Standard & Poor's, Baa1 by Moody's; Offering Expected to Close on or About Jan 25

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Chesswood Initiated Review of Strategic Alternatives to Maximize Shareholder Value; to Evaluate Range of Alternatives to Determine Best Path Forward to Maximize Value for Shareholders; to Consider Sale of Certain Assets, a Wind Dn of Portfolios, Other Strategic Options; Dividends to Hldrs Will Be Suspended During Review

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Farmers Edge Enters Agreement With Fairfax to Take Farmers Edge Private at C$0.35/Share; Deal Follows Initial Proposal From Fairfax Offering C$0.25 Per Common Share; Purchase Price Represents 218% Premium to Closing Level Day Before Initial Proposal; Special Committee of Board Independent Directors Unanimously Recommended Deal; Transaction Will Be Financed by Cash on Hand, Not Subject to Financing Condition; Expects to Be De-Listed From Toronto Stock Exchange Upon Deal Close

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West Fraser Timber Sawmill in Fraser Lake, British Columbia, to Close; Cites Inability to Access Economically Viable Fiber in Region; About 175 Employees to Be Affected by Closure

Expected Major Events for Tuesday

05:00/JPN: Dec Steel Production

05:00/JPN: Dec Supermarket sales

07:00/UK: Dec Public sector finances

08:59/JPN: Japan Monetary Policy Meeting decision

08:59/JPN: Nov Final Labour Survey - Earnings, Employment & Hours Worked

13:55/US: 01/20 Johnson Redbook Retail Sales Index

15:00/US: Dec State Employment and Unemployment

15:00/US: Jan Richmond Fed Business Activity Survey

18:00/US: Dec Money Stock Measures

21:30/US: API Weekly Statistical Bulletin

23:50/JPN: Dec Provisional Trade Statistics for the Month

All times in GMT. Powered by Kantar Media and Dow Jones.

Expected Earnings for Tuesday

3M Company (MMM) is expected to report $2.01 for 4Q.

AMCON Distributing Co (DIT) is expected to report for 1Q.

AmeriServ Financial Inc (ASRV) is expected to report for 4Q.

Anixa Biosciences Inc (ANIX) is expected to report for 4Q.

Atlantic Union Bankshares Corp (AUB) is expected to report for 4Q.

Baker Hughes Co (BKR) is expected to report $0.47 for 4Q.

Bassett Furniture Industries Inc (BSET) is expected to report $-0.06 for 4Q.

Capital City Bank Group (CCBG) is expected to report $0.72 for 4Q.

Citizens Holding Co (CIZN) is expected to report for 4Q.

City Holding Co (CHCO) is expected to report $1.89 for 4Q.

Cohbar Inc (CWBR) is expected to report for 3Q.

Community Bank System (CBU) is expected to report $0.83 for 4Q.

D.R. Horton (DHI) is expected to report $2.87 for 1Q.

Dakota Gold Corp (DC) is expected to report for 4Q.

First Bancorp Inc (FNLC) is expected to report for 4Q.

First Busey (BUSE) is expected to report $0.50 for 4Q.

Forestar Group Inc (FOR) is expected to report $0.55 for 1Q.

Gatx Corp (GATX) is expected to report $1.55 for 4Q.

General Electric Co (GE) is expected to report for 4Q.

Halliburton Co (HAL) is expected to report $0.80 for 4Q.

Intuitive Surgical Inc (ISRG) is expected to report $1.30 for 4Q.

Invesco Ltd (IVZ,IVZ-LN) is expected to report $0.38 for 4Q.

Jewett-Cameron (JCT-T,JCTCF) is expected to report for 1Q.

Johnson & Johnson (JNJ) is expected to report $2.00 for 4Q.

Lockheed Martin Corp (LMT) is expected to report $7.28 for 4Q.

NBT Bancorp (NBTB) is expected to report $0.75 for 4Q.

Netflix Inc (NFLX) is expected to report $2.21 for 4Q.

Nicolet Bankshares Inc (NIC) is expected to report $1.90 for 4Q.

Old National Bancorp (ONB) is expected to report $0.45 for 4Q.

Peoples Bancorp (Ohio) (PEBO) is expected to report $0.96 for 4Q.

Procter & Gamble Co (PG) is expected to report $1.71 for 2Q.

RTX Corp (RTX) is expected to report for 4Q.

Sandy Spring Bancorp Inc (SASR) is expected to report $0.51 for 4Q.

Southern First Bancshares Inc (SFST) is expected to report $0.39 for 4Q.

Summit State Bank (SSBI) is expected to report for 4Q.

Synchrony Financial (SYF) is expected to report $0.96 for 4Q.

(MORE TO FOLLOW) Dow Jones Newswires

January 23, 2024 06:16 ET (11:16 GMT)

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