North American Morning Briefing: Investors Take Stock After Tuesday's Records

OPENING CALL

Stocks were poised for a potential pullback Wednesday, a day after the S&P 500 closed at its 41st record of the year.

Big tech stocks in particular are taking some pain, with Tesla and Broadcom each down premarket.

Globally, the picture was mixed.

Chinese shares climbed again after China's central bank added to its stimulus blitz with another rate cut .

The data and earnings calendar is light Wednesday.

The main scheduled event will be a fresh look at the housing market, with data on new home sales, followed by earnings from Micron after the close.

Premarket Movers

SAP was down in U.S. trading after Bloomberg reported that it is being investigated by the Justice Department over potential price fixing.

Trump Media & Technology shares advanced more than 3%. The stock is down more than 30% this month, however.

Postmarket Movers

Commvault Systems is buying Clumio for about $47 million, a company that specializes in working with Amazon Web Services infrastructure. Shares rose 1.9%.

KB Home posted lower-than-expected profits. Shares fell 6.4%.

Progress Software earnings topped analysts' estimates and the company raised its profit and revenue outlook. The stock gained 5%.

Stitch Fix reported lower revenue and a deep drop in its active client base. Shares fell 24%.

Today's Headlines/Must Reads:

- World Economy on Track for Slight Pickup as Inflation Is Tamed

- China Says It Test-Fired Intercontinental Ballistic Missile

- Harris to Outline Economic Vision to Counter Trump's

MARKET WRAPS

Forex:

The dollar fell after China's stimulus boosted emerging market currencies and weaker-than-expected consumer confidence data fueled concerns about an economic slowdown, ING said.

"The jury is out on whether this China stimulus story is an enduring one for global FX."

However, investors seem to have shifted to a sell-dollar mindset on mounting evidence of a slowdown, it said, adding that the currency might continue trading on the soft side ahead of Friday's core PCE price index data.

UOB said the dollar was likely to continue falling against the offshore Chinese yuan, with the weekly chart indicating a lack of support below 6.9960, with the next substantial support at 6.8100.

The euro could extend its gains after receiving a boost from China's stimulus measures, as the European Central Bank is unlikely to accelerate interest rate cuts as some expect, MUFG Bank said.

"Increased global growth optimism will help and the stimulus measures announced by China will certainly add to dollar selling momentum," MUFG said.

Market expectations for an October ECB rate cut are rising but until underlying inflation is closer to target, the ECB is likely to continue with a cautious approach to rate cuts despite weaker growth, MUFG said.

Energy:

Oil prices fell as demand concerns kept a lid on the boost from China's stimulus package.

"The rising geopolitical tensions and the Chinese stimulus measures strengthen the oil bulls' hands, but the $72.85-a-barrel level is yet to be cleared to send the price of a barrel into the medium-term bullish consolidation zone," Swissquote Bank said.

Metals:

Three-month copper rose and gold was flat.

Sucden Financial said Tuesday's gains, on the back of China's plans, are expected to be short-lived and unlikely to significantly affect the price trend in the near term.

HSBC Global Research said a detailed analysis of the potential impact of China's central bank rate cuts on copper and aluminum prices shows that the two metals are likely to be range bound in this rate cycle and rally when demand picks up.

Lithium

Lithium has little scope to rebound further, as supply remains abundant relative to demand, HSBC Global Research said separately.

TODAY'S TOP HEADLINES

GE Vernova CEO Appraises Nuclear Power Prospects, Offshore Wind Business

The nuclear power industry is set to add "gigawatts upon gigawatts" of capacity heading into the 2030s, while offshore wind in the U.S. sorts out its business model, according to GE Vernova CEO Scott Strazik.

Strazik leads General Electric's spinoff of its power and wind business, which started trading as a stand-alone company in April. The energy company has emerged at a crossroads for the nuclear energy industry as companies contend with managing aging reactors while exploring newer reactor technologies-along with alternative energy sources such as onshore and offshore wind energy.

Skael Co-Founder Faces U.S. Fraud Charges

The former chief executive of Skael faces criminal charges and a lawsuit from the Securities and Exchange Commission for allegedly lying to investors about the business-automation startup's revenue figures.

Between January 2021 and February 2022, the SEC alleged in a lawsuit filed Tuesday, Skael co-founder and CEO Baba Nadimpalli managed to raise more than $30 million from investors in the San Francisco-based startup by claiming it had as much as $7 million in annual recurring revenue when the actual figure was no more than $170,000.

Meta Platforms Kicks Off Its Connect Developers Conference Today. What to Expect.

Meta's annual developer Connect conference kicks off on Wednesday.

Meta Platforms CEO Mark Zuckerberg's keynote starts at 1 p.m. ET and will be streamed live on Facebook. He is expected to share the company's vision for artificial intelligence and Meta's latest product announcements.

The High-Stakes Spat Over How Much Oil the World Really Needs

What's 1.1 million barrels between adversaries?

The Organization of the Petroleum Exporting Countries and the International Energy Agency don't see eye to eye on much. The latter was basically founded as an anti-OPEC 50 years ago to represent energy consumers a year after that cartel's oil embargo quadrupled global crude prices. But now the gulf between their forecasts of how much oil the world will need in 2024 is oddly wide, especially for this late in the year.

Stock-market indicator with a near-perfect track record is flashing a 'buy' signal

One closely-watched stock-market indicator is flashing a bright-red buy signal as more companies' shares join the rally.

A sharp increase in a measure known as the McClellan Summation Index is sending a signal that has predicted further gains for the S&P 500 with near-perfect accuracy, according to Dean Christians, a senior research analyst at SentimenTrader.

Senate Report Details Security Failings That Almost Got Trump Killed

Shortly before Donald Trump was nearly assassinated at a July 13 campaign rally, a Secret Service sniper watched from a rooftop perch as local officers ran with guns drawn toward a building about 400 feet from where the former president spoke.

The frantic scene prompted snipers to place their rifles in tripods and start searching through their scopes. But the counter-sniper team leader didn't radio Trump's detail to have the former president removed from the rally stage in Butler, Pa. "The thought did not cross my mind," he recalled to Senate investigators.

Write to clare.kinloch@wsj.com

TODAY IN CANADA

Earnings:

AGF Management 3Q

Economic Indicators (ET):

Nothing major sheduled.

Stocks to Watch:

Middlefield Global Real Asset Fund Approves Merger Into Real Estate Split Corp

Other News:

French President Emmanuel Macron meets Canadian Prime Minister Justin Trudeau

Expected Major Events for Wednesday

05:00/JPN: Aug Supermarket sales

05:30/JPN: Aug Tokyo area department store sales

05:30/JPN: Aug Nationwide department store sales

11:00/US: 09/20 MBA Weekly Mortgage Applications Survey

14:00/US: Aug New Residential Sales

14:30/US: 09/20 EIA Weekly Petroleum Status Report

23:01/UK: Aug UK monthly automotive manufacturing figures

23:30/JPN: Jul Final Labour Survey - Earnings, Employment & Hours Worked

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

Expected Earnings for Wednesday

AGF Management Ltd - Class B (AGF.B.T) is expected to report $0.36 for 3Q.

Akoustis Technologies Inc (AKTS) is expected to report $-0.14 for 4Q.

Aviat Networks (AVNW) is expected to report $0.54 for 4Q.

Cintas Corp (CTAS) is expected to report $1.00 for 1Q.

Concentrix Corp (CNXC) is expected to report $1.05 for 3Q.

Espey Manufacturing & Electronics Corp (ESP) is expected to report for 4Q.

HB Fuller Co (FUL) is expected to report $1.10 for 3Q.

Jefferies Financial Group Inc (JEF) is expected to report $0.78 for 3Q.

Meta Materials Inc (MMAT) is expected to report for 2Q.

Micron Technology Inc (MU) is expected to report $0.82 for 4Q.

Natural Alternatives International Inc (NAII) is expected to report for 4Q.

RM2 International Inc (RMTO) is expected to report for Interim.

Rave Restaurant Group Inc (RAVE) is expected to report for 4Q.

Raymond James Financial Inc (RJF) is expected to report.

S&W Seed (SANW) is expected to report for 4Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

Banc of California Raised to Outperform From Neutral by Wedbush

Catalent Cut to Neutral From Outperform by Baird

Columbia Banking System Raised to Outperform From Neutral by Wedbush

Comerica Raised to Outperform From Neutral by Wedbush

Costco Cut to Hold From Buy by Truist Securities

Customers Bancorp Cut to Neutral From Outperform by Wedbush

Equinix Cut to Hold From Buy by CFRA

Equity Residential Cut to Neutral From Buy by B of A Securities

Essex Property Cut to Neutral From Buy by B of A Securities

Exxon Mobil Cut to Neutral From Buy by Redburn Atlantic

First Citizens Bancshares Cut to Neutral From Outperform by Wedbush

First Horizon Cut to Neutral From Outperform by Wedbush

Insperity Cut to Market Perform From Outperform by William Blair

Invitation Homes Cut to Neutral From Buy by B of A Securities

Kenvue Cut to Sector Perform From Outperform by RBC Capital

Leonardo DRS Cut to Neutral From Buy by B of A Securities

(MORE TO FOLLOW) Dow Jones Newswires

September 25, 2024 06:15 ET (10:15 GMT)

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