North America Morning Brief: Equity Futures -2-

Snapchat’s parent company said it generated $1.3 billion in sales in the fourth quarter, roughly unchanged from the same period a year earlier and broadly in line with Wall Street expectations. The growth figure was the lowest for Snap since it went public nearly six years ago.

Chinese EV makers leap into Hong Kong, extending Wall Street rally

Shares of Chinese electric car makers jumped in Hong Kong on Wednesday, extending soaring overnight gains to Wall Street, driven in part by expectations of a recovery in sales in the world’s largest auto market.

Shares of Hong Kong-listed Li Auto Inc. are up 8.7% since the midday trading lull. Xpeng Inc. jumped 7.6% and NIO Inc. jumped 5.9%.

Federation day is here. Powell’s tone will say it all.

The Federal Reserve is on track to slow the pace of monetary policy tightening on Wednesday by raising interest rates by a modest quarter of a percentage point, its smallest hike in nearly a year. But don’t confuse a central bank downshift with an accommodative pivot.

With a 25 basis point interest rate hike all but stalled (one basis point is one hundredth of a percentage point), the biggest news on Wednesday will come not from the Fed’s policy moves, but from the statement and press conference following its two-day political meeting. Fed Chairman Jerome Powell has been stressing for months that the future pace of the tightening matters less than how far interest rates will ultimately rise, and investors and economists will scan his words for clues as to where the US rate might land. federal funds.

Investors shrug off weak earnings reports as stocks rebound at the start of the year

Lackluster earnings reports from some of the largest US companies have not dampened the stock market’s rebound.

Even some companies that posted disappointing results saw their shares soar in the following days. Microsoft Corp. last week posted the slowest sales growth in more than six years, but its shares finished the week up 3.3%. American Express Co. and Alaska Air Group Inc. both reported lower-than-expected earnings and revenues. Their shares are up 14% and 2.4% respectively on the week.

Eurozone inflation eases for third month as ECB rates rise

The eurozone’s annual rate of inflation fell for the third consecutive month in January as energy prices continued to decline from their recent highs, a decline unlikely to dissuade the European Central Bank from raising interest rates further this week.

Russia’s invasion of Ukraine has pushed eurozone energy prices and inflation to sharp increases for much of last year, but hotter-than-usual temperatures, high levels of gas storage natural gas across Europe and various government programs to cap energy prices have begun to reverse this trend as 2022 approaches. in the end.

Russia’s “energy weapon” is also hurting China

Europe has had a harsh but warm winter, and a herculean effort to find new supplies of natural gas has limited the economic damage caused by Moscow’s decision to curb gas exports to the continent. Instead, some of that damage is manifesting itself in a very different gas market that Russia is counting on for its growth: China.

Gold is gaining ground. Here’s how to play.

Oil and other commodities were the stars of 2022. Gold, already off to a good start, could take up that mantle in 2023.

Last year was a disappointment for those who expected gold to perform well amid a spike in inflation. It was up just 0.4% to $1,814 an ounce, though it was up more than 10% in the last two months of the year. But its performance was lackluster compared to exchange-traded fund Energy Select Sector SPDR (ticker: XLE), which tracks oil inventories and is up 64% in 2022, and United States Oil (USO), which invests in oil futures and gained 29%. Worse still were gold miners’ stocks: The VanEck Gold Miners ETF (GDX) fell 9%.

The Eurozone unemployment rate stabilized in December, signaling the resilience of the labor market

The eurozone’s unemployment rate held up at its all-time low in December, highlighting the strength of the labor market at the end of the year even as the economy lost steam.

The euro zone’s unemployment rate was 6.6% in December, unchanged from November, according to data from European Union statistics agency Eurostat released on Wednesday. This is the lowest level in the historical series, after the unemployment rates for October and November were revised to 6.6% from 6.5% initially estimated.

The trio of Indiana cities tops the WSJ/Realtor.com real estate index

Three Indiana cities led the Wall Street Journal/Realtor.com Emerging Housing Market Index in the fourth quarter, as affordable markets continued to dominate the rankings.

Lafayette, Ind., a metropolitan area of approximately 225,000 people, was the top emerging real estate market in the quarter, followed by Fort Wayne, Ind.; Elkhart, Indiana; Topeka, Kan.; and Johnson City, Tennessee.

China Caixin Manufacturing PMI improves but remains in contraction

A private indicator of China’s manufacturing activity improved in January but remained in contraction territory for the sixth consecutive month.

The Purchasing Managers’ Index rose to 49.2 in January from 49.0 in December, according to data released Wednesday by Caixin Media Co. and S&P Global. The 50 mark separates expansion from contraction.

Ukraine prepares for the big Russian offensive

Russia is preparing to launch a major new offensive against Ukraine in the coming weeks, a senior Ukrainian security official said, adding to growing concerns in Kiev and the West that the Kremlin is preparing a new push to seize large areas. of the country.

“Russia is preparing for the maximum escalation,” Oleksiy Danilov, secretary of the National Security and Defense Council of Ukraine, said in an interview with Sky News posted online early Wednesday on local time. “He’s gathering everything he can, doing drills and training.”

Ukraine denounces Western executives of Russian companies

Ukraine is increasing pressure on Western officials who have held positions in Russian companies, saying their presence indirectly supports Moscow’s war effort.

Many Western leaders have cut ties with Russia after it invaded Ukraine last year, sometimes in opposition to the war or to comply with Western sanctions. Others have stayed for various reasons, including saying they have a fiduciary duty to their investors, a responsibility to local employees, or years-old ties to Russia that are hard to break.

French forces seize Iranian-supplied weapons bound for Yemen

Elite French special forces have seized a shipment of Iranian-supplied weapons and ammunition intended for militants in Yemen as part of a more thorough effort to contain Tehran, according to officials familiar with the operation.

On Jan. 15, officials said, a French warship detained a suspected smuggling vessel off the Yemeni coast, where the specially trained French team embarked. On board, officials said, the French military discovered more than 3,000 assault rifles, half a million rounds of ammunition and 20 anti-tank guided missiles.

Kathy Hochul is aiming for higher payroll taxes and casino revenue to avoid subway cuts in New York City

ALBANY, NY-New York Governor Kathy Hochul will seek to raise payroll taxes for upstate businesses and use revenue from new casinos to support mass transit in New York City as part of her proposed state budget Wednesday .

The Democratic governor is proposing an additional $1.3 billion annually for the Metropolitan Transportation Authority through the stock, his aides said. That includes a request for New York City to contribute about $500 million more to the authority, which operates subways, buses and commuter rail, as well as bridges and tunnels.

Missing radioactive capsule found in outback Australia

A tiny capsule containing radioactive material has been found that has sparked a search of hundreds of miles of highway in Australia’s outback, authorities said Wednesday.

The success “is testament to incredible teamwork between agencies in the face of seemingly insurmountable odds,” the Western Australian State Department of Fire and Emergency Services said on Twitter.

Tire Nichols funeral will be attended by Al Sharpton and Kamala Harris

MEMPHIS, Tenn.-Hundreds of people are expected to gather here Wednesday for Tire Nichols’s funeral, weeks after an encounter with police led to his death and sparked protests across the country.

Reverend Al Sharpton, the civil rights leader, will praise Mr. Nichols, a 29-year-old FedEx worker who was pulled over by police on Jan. 7. hit several times by officers. He died in a Memphis hospital three days later.

Email [email protected] IN CANADA TODAY

Earnings:

CGI 1Q

Economic Indicators (ET):

0930 Jan Canada Manufacturing PMI

Actions to watch out for:

Atlas Global Brands appoints Bernie Yeung as CEO and Jason Cervi as CFO, effective January 31

Bird Agrees to Acquire Ontario Telecommunications and Utility Contractor; Agreed to Acquire Trinity Communication Services; The transaction is expected to increase EPS in 2023

Exco Technologies 1Q EPS C$0.12; 1Q sales $139.1 million Canadian

Big events scheduled for Wednesday

00:01/UK: January shop price index

00:01/UK: 1Q CBI SME Trends Survey

00:30/JPN: Japanese manufacturing PMI for January

05:00/JPN: January car sales

06:00/RUS: January Russian manufacturing PMI

07:00/UK: January National House Price Index

08:45/ITA: January Italian manufacturing PMI

08:50/FRA: Jan France Manufacturing PMI

08:55/GER: Jan Germany Manufacturing PMI

09:30am/UK: Jan S&P Global / CIPS UK manufacturing PMI