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North American Morning Briefing: Bond Yields Hit -2-

01/18/2022 | 06:14am EDT

The chief executives of major passenger and cargo airlines said there could be significant flight disruptions when new 5G service goes live in the U.S. this week, unless implementation of the wireless service within 2 miles of major airport runways is delayed.

The outlook had worsened for flight disruptions from the planned rollout of new high-speed wireless services, the airline executives said Monday in a letter to U.S. officials.

Offices Are Leased Up, Thanks to Cash Gifts for Tenants, Months of Free Rent

The recent recovery of U.S. office rents owes much of its success to something landlords hate to discuss: all the freebies, cash gifts and other incentives they have to fork over to tenants.

These sort of payouts have long existed to a degree in the office, retail real-estate and apartment markets, especially in places like New York City and San Francisco. But they have never been so big or so commonplace as they are in urban office markets these days, real-estate brokers say.

With Rate Increases Looming, Investors Dump Shares of Money-Losing Companies

Moonshot stocks are coming back to Earth.

As the Federal Reserve moves closer to raising interest rates, investors are repricing their bets on one of the riskiest corners of the market: shares of companies that don't make money. Cash-burning technology firms, biotechnology companies without any approved drugs and startups that listed quickly via mergers with blank-check companies-some of which soared during the pandemic-have dropped sharply.

BOJ Raises Inflation Expectations Amid Pandemic-Related Supply Shortages

TOKYO-The Bank of Japan raised its price forecast slightly amid pandemic-related supply shortages, although it still expects its 2% inflation target won't be reached for at least the next two years.

In its quarterly outlook released Tuesday, the bank's policy board projected inflation would increase 1.1% in the year ending March 2023 and 1.1% in the following year, up from previous projections for 0.9% and 1.0%, respectively.

China PBOC Aims to Act Forcefully to Help Stabilize Economy

China's central bank said Tuesday that it would act early and more forcefully to help stabilize the economy in 2022, a politically important year for Chinese leaders.

The People's Bank of China plans to guide financial institutions to expand their credit issuance this year, and will use multiple monetary instruments to keep market liquidity reasonably ample, said Liu Guoqiang, vice governor at the central bank, during a briefing.

German Economic Expectations Rebounded to a Five-Month High in January

Economic expectations in Germany rebounded at the beginning of the year after falling the previous month as financial market experts expected the hit from the Covid-19 Omicron wave to be short-lived, the ZEW economic research institute said Tuesday.

The index of economic expectations increased to 51.7 in January from 29.9 in December, topping the 32.5 consensus forecast from economists polled by The Wall Street Journal and the highest reading since July.

UK Labor Market Tightened in December Despite Omicron Woes

The number of people employed in the U.K. rose in December and unemployment continued to fall, signaling that the end of the furlough program and the spread of the Omicron coronavirus variant didn't weaken the country's labor market.

Staff on businesses' payrolls increased by 184,000 in December compared with the previous month, to 29.5 million, according to data from the Office for National Statistics released Tuesday.

BlackRock's Climate Stance Is About Profits, Not Politics, Larry Fink Says

Larry Fink's efforts to get companies to adopt climate-friendly policies have led some to call him an activist. The BlackRock Inc. chairman and chief executive prefers a different label: capitalist.

In his annual letter to the CEOs of the companies in which BlackRock invests, Mr. Fink said businesses that don't plan for a carbon-free future risk being left behind. The quest for long-term returns, and not politics, is what animates the money manager's efforts, he wrote.

Taliban Intensify Efforts to Take Control of Afghanistan's Overseas Embassies

ROME-Five months after the Taliban seized Kabul, Afghanistan's new rulers are stepping up their campaign to gain control of the country's embassies abroad, most of which continue to be run by diplomats appointed by the former, U.S.-backed government.

No foreign capital has formally recognized the Taliban. And nearly all of the country's 65 diplomatic missions still fly the flag of the fallen Afghan republic-though after the Aug. 15 flight of former President Ashraf Ghani from Kabul, they have no government to represent.

Kim Jong Un's January Missile-Test Barrage Is Fast but Not Furious

SEOUL-North Korea has never started a year with so many weapons tests. Kim Jong Un has many reasons to be in a hurry.

China will soon be on the world's center stage as host of the Winter Olympics. In March, South Koreans will elect a new president who could set a new course for the country's engagement with the North. Pyongyang's provocations could upstage Beijing during the Winter Games or hand political momentum to a more hard-lined South Korean candidate.

Texas, Arizona Have Recovered All the Jobs Lost When Covid-19 Hit

Texas and Arizona have joined two other states in recovering all the jobs they lost at the start of the Covid-19 pandemic, leading a trend that is expected to include another dozen states by the middle of this year.

The states, which also include Utah and Idaho, have benefited from demographic shifts before and during the pandemic-experiencing outsize payroll growth in retail, warehousing, technology and transportation industries. Companies have moved operations to the states, and workers have moved in as well, sometimes leaving more crowded and expensive urban areas. The states-all Republican controlled-also have had relatively relaxed Covid-19 restrictions during the pandemic, which economists say softened the blow on their economies.

Schumer Hits Trouble After Earlier Wins in 50-50 Senate

WASHINGTON-Last month, the Democratic-controlled Senate failed to advance President Biden's roughly $2 trillion economic plan. This week, the party's push to overhaul election practices nationwide is set to fizzle out as well.

These twin setbacks have cast a harsher spotlight on the leadership of Senate Majority Leader Chuck Schumer (D., N.Y.), the lawmaker responsible for navigating President Biden's agenda through the 50-50 Senate after he delivered a Covid-19 aid bill early last year and a bipartisan infrastructure bill in the summer.



Goodfood Market 1Q

Economic Indicators (ET):

0815 Dec Housing Starts

Stocks to Watch:

First Quantum Minerals Releases First ESG Report, Sets Climate Change Targets; Report Aligned with TCFD

First Quantum Opts Out of Net Zero Commitment in Favor of GHG Emissions Reduction Targets; Emissions Targets Based on Commercially Available Solutions; Targets Set Are 'Realistic', Have Identified Pathway to Achievement

First Quantum Doesn't Expect Climate Change Targets to Drive Major Rise in Capex; Targets Also Shouldn't Spur Big Rise in Mine Operating Costs, Based on Current Electricity Costs

First Quantum Aims to Lower GHG Emissions 30% by 2025 via Use of Renewable Energy at Cobre Panama Mine; Aims to Cut Absolute GHG Emissions & Intensity of Copper Production 50% by 2030 via Alternative Power, Reduced Coal Usage; Will Monitor Development of New Technologies, Update Emissions Aims Accordingly

Optiva Sets Up R&D Center in Bengaluru, India, for Telecom Business Support Systems; New Center Is Part of Strategy to Lead in Telecom BSS as Market Continues Disaggregating Software From Network Hardware

Velan Appoints President & CEO Bruno Carbonaro to Bd of Directors; Outgoing Director, Yves Leduc, Will Serve as Special Advisor to Chmn of the Co

Market Talk:

BOC Risks Losing Control of Inflation Without Rate Rise Next Week

The Bank of Canada is losing control of inflation, and raising interest rates next week is its "least unpalatable" option, Bank of Nova Scotia economist Derek Holt says.

Holt's comments are based on the latest quarterly business-outlook survey, in which two-thirds of respondents said they expect annual inflation to stay above 3% for the next two years. A strong majority of companies suggested they will raise wages to hire and retain workers amid intense labor shortages, and those costs are likely to be passed on to customers. BOC has to move now on inflation--which is at an 18-year high of 4.7%--even though authorities have imposed lockdowns to contain a sharp rise in Covid-19 cases, Holt says.

"Omicron is a health policy shock for governments to address. Controlling inflation is the BOC's job full stop."

Expected Major Events for Tuesday

04:30/JPN: Nov Revised Retail Sales

04:30/JPN: Nov Revised Industrial Production

07:00/UK: Dec UK monthly unemployment figures

08:59/JPN: Japan Monetary Policy Meeting decision

08:59/JPN: Jan Monthly Economic Report

09:00/ITA: Nov Foreign Trade EU

10:00/GER: Jan ZEW Indicator of Economic Sentiment

11:00/FRA: Nov OECD Harmonised Unemployment Rates

13:15/CAN: Dec Housing Starts

13:30/US: Jan Empire State Manufacturing Survey

15:00/US: Jan NAHB Housing Market Index

21:00/US: Nov Treasury International Capital Data

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

Expected Earnings for Tuesday

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

Bank First Corp (BFC) is expected to report $1.41 for 4Q.

Bank of New York Mellon Corp (BK) is expected to report $1.01 for 4Q.

Charles Schwab (SCHW) is expected to report $0.78 for 4Q.

Citrix Systems Inc (CTXS) is expected to report $0.37 for 4Q.

Concentrix Corp (CNXC) is expected to report for 4Q.

(MORE TO FOLLOW) Dow Jones Newswires

01-18-22 0613ET

Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) 0.55% 90.783 Delayed Quote.7.67%
BANK OF CHINA LIMITED 0.33% 3.07 Delayed Quote.8.90%
BANK OF NEW YORK MELLON CORPORATION (THE) 1.04% 43.77 Delayed Quote.-24.64%
BLACKROCK, INC. 1.24% 600.44 Delayed Quote.-34.42%
BRITISH POUND / JAPANESE YEN (GBP/JPY) 0.36% 160.45 Delayed Quote.2.55%
CANADIAN DOLLAR / JAPANESE YEN (CAD/JPY) -0.02% 99.758 Delayed Quote.9.33%
CITRIX SYSTEMS, INC. -0.19% 99.27 Delayed Quote.4.95%
CONCENTRIX CORPORATION 1.44% 144.14 Delayed Quote.-19.30%
EURO / JAPANESE YEN (EUR/JPY) 0.67% 136.05 Delayed Quote.3.09%
FIRST QUANTUM MINERALS LTD. -0.68% 36.33 Delayed Quote.20.02%
GOODFOOD MARKET CORP. -2.70% 1.8 Delayed Quote.-55.77%
INDIAN RUPEE / JAPANESE YEN (INR/JPY) 0.07% 1.645062 Delayed Quote.6.30%
NEW ZEALAND DOLLAR / JAPANESE YEN (NZD/JPY) 0.75% 82.693 Delayed Quote.4.07%
ON SEMICONDUCTOR CORPORATION 0.70% 56.46 Delayed Quote.-16.87%
OPTIVA INC. 1.78% 25.1 Delayed Quote.-8.26%
S&P 500 0.01% 3901.36 Real-time Quote.-18.14%
S&P GSCI COPPER INDEX 2 0.71% 673.3716 Real-time Quote.-3.17%
THE BANK OF NOVA SCOTIA -0.30% 80.24 Delayed Quote.-10.40%
THE CHARLES SCHWAB CORPORATION 0.99% 63.28 Delayed Quote.-24.76%
US DOLLAR / JAPANESE YEN (USD/JPY) -0.34% 127.454 Delayed Quote.11.11%
VELAN INC. -1.47% 8.72 Delayed Quote.6.34%
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