PRE-OPEN
Futures for Canada’s main stock index weakened as focus shifted to unemployment figures that could bolster the case for a more aggressive central bank move this month. Wall Street futures were down, while European shares were mixed ahead of the much-awaited U.S. jobs data. In Asian markets, Japan’s Nikkei ended flat after former prime minister Shinzo Abe was shot while campaigning for a parliamentary election, while Chinese stocks ended lower as worries over COVID-19 flare-ups and geopolitical tensions weighed on sentiment. Gold prices steadied, while the U.S. dollar was lifted on safe-haven demand. Oil prices declined as demand downturn outweighed global supply crunch worries. ​

• U.S. job growth likely slowed in June; unemployment rate seen at 3.6%
U.S. employers likely hired the fewest workers in 14 months in June, but the jobless rate probably remained near pre-pandemic lows, underscoring labor market tightness that could encourage the Federal Reserve to deliver another 75-basis-point interest rate increase later this month.

• Big banks’ Q2 earnings to shed light on gloomy U.S. mortgage outlook
U.S. analysts and economists will be watching to see how banks’ mortgage businesses are faring during their second-quarter earnings this month, as U.S. Federal Reserve rate hikes continue to crimp mortgage originations and refinancings.

• Essity buys 80% of Canada’s Knix Wear for $313 million
Sweden’s Essity said it had agreed to buy 80% of Canadian company Knix Wear, a maker of leakproof apparel for periods and incontinence, for around 3.3 billion Swedish crowns.

• Germany confirms positive signal from Canada on Nord Stream 1 turbine
Germany confirmed that the government had received a positive signal from Canada regarding the delivery of a turbine needed for the maintenance of the Nord Stream 1 gas pipeline to Germany, but could not say that the turbine had been delivered.

INSIGHT
Investors fear earnings season will spark new equities selloff
The upcoming corporate earnings season could prompt another sharp fall in global share prices with profit forecasts looking far too upbeat given mounting recession risks, investors and analysts warn.

ECONOMIC EVENTS (Eastern Time)
0830 Average hourly wages permanent employee yy for June: Prior 4.50%
0830 Employment change for June: Expected 23,500; Prior 39,800
0830 Unemployment rate for June: Expected 5.1%; Prior 5.1%
0830 Full-time employment change SA for June: Prior 135,400
0830 Part-time employment change SA for June: Prior -95,800
0830 Participation rate for June: Expected 65.3%; Prior 65.3%

COMPANIES REPORTING
July 8:
MTY Food Group Inc: Expected Q2 earnings of 96 Canadian cents per share

CORPORATE EVENTS (Eastern Time)
0830 MTY Food Group Inc: Q2 earnings conference call
1100 Velan Inc: Q1 earnings conference call

EX-DIVIDENDS
Guardian Capital Group Ltd: Amount C$0.24

 

• Tesla sells record high China-made vehicles in June
Tesla in June achieved its highest monthly sales of China-made vehicles since opening its Shanghai plant in 2019, data showed, as the U.S. carmaker ramped up output which had been hit by the city’s COVID-19 lockdown.

• Spirit postpones Frontier deal vote, to continue talks with Frontier and JetBlue
Spirit Airlines said it has postponed a shareholder vote scheduled for Friday on its $2.4 billion sale to Frontier Group so its board can continue discussions with both Frontier and JetBlue Airways.

• U.S. mulls fresh bid to restrict chipmaking tools for China’s SMIC -sources
The Biden administration is considering new targeted restrictions on shipments of chipmaking tools to China, seeking to hamstring advances by China’s largest chipmaker, SMIC, without slowing the flow of chips into the global economy, five people familiar with the matter told Reuters

PRE-OPEN
Wall Street futures were down, while European shares were mixed ahead of the much-awaited U.S. jobs data. In Asian markets, Japan’s Nikkei ended flat after former prime minister Shinzo Abe was shot while campaigning for a parliamentary election, while Chinese stocks ended lower as worries over COVID-19 flare-ups and geopolitical tensions weighed on sentiment. Gold prices steadied, while the dollar was lifted on safe-haven demand. Oil prices declined as demand downturn outweighed global supply crunch worries. ​

• Levi Strauss & Co: The company’s denim jeans and jackets were swept off the racks in the second quarter as people returning to work and social events stuck to the comfortable styles that had dominated during lockdowns. That, along with higher prices, helped Levi’s trump results estimates and raise its quarterly dividend. Still, revenue from Levi’s value brands including Signature were down mid-single digits in the quarter, signaling that lower-income consumers are starting to feel the pinch from rising inflation, Chief Executive Officer Charles Bergh said. In the quarter ended May 29, the Dockers and Denizen owner’s total revenue rose 15% to $1.47 billion, above analysts’ expectation of $1.43 billion. Levi’s also reaffirmed its revenue and profit forecasts for 2022 and bumped up its quarterly dividend by 20% to 12 cents per share. Net income fell 23% though, as the jeans maker recorded $60 million in charges related to the suspension of its operations in Russia.  Excluding items, the 169-year-old company earned 29 cents per share, beating estimates of 23 cents. 

• GameStop Corp: The company said on Thursday it had terminated the employment of Chief Financial Officer Michael Recupero. The exit was first reported by Axios, which also said the company was laying off an undisclosed number of employees, citing a memo. Recupero will be replaced by Chief Accounting Officer Diana Saadeh-Jajeh. As part of efforts to focus on online sales following the pandemic, GameStop last year also tapped Amazon Australia’s head, Matt Furlong, as its chief executive officer. Both executives were hired as chairman Ryan Cohen pushed for a turnaround at the largely brick-and-mortar retailer and led a total shake up of the management team.

• Snap Inc: U.S. Secret Service Director James Murray is joining the social media company as its chief security officer following his retirement from federal service, a Snap spokesperson said on Thursday. Murray’s retirement was announced by the Secret Service in a statement earlier on Thursday. He will start in his new role with Snap on Aug. 1 and report directly to Chief Executive Officer Evan Spiegel, the company spokesperson said.

• Berkshire Hathaway Inc & Occidental Petroleum Corp: Warren Buffett’s Berkshire said on Thursday it bought another 12 million shares of Occidental this week, giving it an 18.7% stake in the oil company. The purchases were made on Tuesday and Wednesday and cost about $698 million, Berkshire said in a U.S. Securities and Exchange Commission filing. Buffett’s company had also purchased 9.9 million Occidental shares last week. It is by far the largest shareholder of Houston-based Occidental, owning 175.4 million shares worth $10.8 billion. Berkshire also owns $10 billion of Occidental preferred stock, and has warrants to buy another 83.9 million common shares for $5 billion, or $59.62 each. That is slightly below the shares’ Thursday closing price of $61.47. 

• Cheniere Energy Inc: The company has asked the Biden administration to exempt it from limits on emissions of cancer-causing pollutants, arguing they would force the top U.S. exporter of liquefied natural gas to shut for an extended period and endanger the country’s efforts to ramp up supplies to Europe, according to documents reviewed by Reuters. The request imposes an uncomfortable dilemma on President Joe Biden’s administration as it tries to balance efforts to slash pollution from the fossil fuel industry against promises to help European allies cut energy ties with Moscow over its invasion of Ukraine. The request also reflects a huge financial vulnerability for Cheniere and its shareholders at a time it has been enjoying increased sales and a rising stock price.

• Enbridge Inc: State of Michigan regulators on Thursday ordered the company to file additional information on safety and engineering for its proposed Line 5 oil pipeline tunnel, describing Enbridge’s current application as “deficient.” Enbridge is planning to build a tunnel beneath the Straits of Mackinac in the Great Lakes to rehouse its existing 540,000 barrel per day Line 5 pipeline. “The Michigan Public Service Commission (MPSC) today ordered the record reopened in Enbridge Energy LP’s application … finding that the record is deficient on critical matters of engineering and safety, and additional evidence is needed for the Commission to complete its analysis,” regulators said in a statement. The decision is a setback for Enbridge, which has proposed building the $750-million tunnel to address concerns that Line 5 could spill into the Great Lakes.

• Frontier Group Holdings Inc, JetBlue Airways Corp & Spirit Airlines Inc: Spirit Airlines said it has postponed a shareholder vote scheduled for Friday on its $2.4 billion sale to Frontier Group so its board can continue discussions with both Frontier and JetBlue Airways. The Spirit shareholder vote, which has been delayed twice before, is being pushed back for a third time to give Spirit and JetBlue time to finalize a deal, sources told Reuters, requesting anonymity as the discussions are confidential. Spirit said it now plans to hold a special meeting on July 15. JetBlue CEO Robin Hayes said in a statement the airline was “encouraged by our discussions with Spirit and are hopeful they now recognize that Spirit shareholders have indicated their clear, overwhelming preference for an agreement with JetBlue.”

• JPMorgan Chase & Co & Wells Fargo & Co:  U.S. analysts and economists will be watching to see how banks’ mortgage businesses are faring during their second-quarter earnings this month, as U.S. Federal Reserve rate hikes continue to crimp mortgage originations and refinancings. After hiring tens of thousands of staff between 2018 and 2020 to handle surging mortgage originations and refinancings driven by low interest rates, the mortgage sector is downsizing. U.S. banks including JPMorgan and Wells Fargo have started cutting staff, with more industry layoffs expected in coming months, said analysts and economists. “Over the next month or two we’ll see the bulk of layoffs,” said Doug Duncan, chief economist at Fannie Mae, which, along with Freddie Mac, backs many U.S. mortgages. “There is usually about a six-month lag between a turn in the market and layoffs.”

• Pilgrim’s Pride Corp: Three executives who worked for the poultry company and two executives of Claxton Poultry Farms were found not guilty on Thursday of fixing prices in the poultry sector.  A court official said on Thursday in an email that the five were acquitted, ending the Justice Department’s third attempt to win a conviction.  Former Pilgrims Pride chief executives William Lovett and Jayson Penn, were found not guilty, as well as former Pilgrim’s Pride vice president Roger Austin. Mikell Fries, president of Claxton Poultry, and Scott Brady, a Claxton vice president, were also acquitted.

• Tenaris SA: The company said on Thursday it would acquire U.S. seamless steel pipe producer Benteler Steel & Tube Manufacturing Corp for $460 million as the Luxembourg-based company seeks to expand its manufacturing capabilities in the country. Tenaris, a global manufacturer of steel pipes, will acquire 100% of Benteler Steel on a cash-free, debt-free basis, which includes $52 million of working capital, it said in a statement. The deal is subject to regulatory approval from the U.S. antitrust authorities and other local entities, Tenaris said. The merger is expected to close during the fourth quarter of 2022.

• Tesla Inc: The carmaker in June achieved its highest monthly sales of China-made vehicles since opening its Shanghai plant in 2019, data showed, as the U.S. carmaker ramped up output which had been hit by the city’s COVID-19 lockdown.  Tesla sold 78,906 China-made vehicles in June, including 968 for export, the China Passenger Car Association(CPCA) said. In May it sold 32,165 vehicles and exported 22,340. Tesla also achieved the highest monthly output at its Shanghai plant in June, added CPCA’s Secretary General Cui Dongshu, without giving a specific number. Separately, Samsung Electro-Mechanics said that it is in talks with to possibly supply camera modules, but that it cannot reveal the deal size or amount at this time.

ECONOMIC EVENTS (Eastern Time)
0830 Non-farm payrolls for June: Expected 268,000; Prior 390,000
0830 Private payrolls for June: Expected 240,000; Prior 333,000
0830 Manufacturing payrolls for June: Expected 15,000; Prior 18,000
0830 Government payrolls for June: Prior 57,000
0830 Unemployment rate for June: Expected 3.6%; Prior 3.6%
0830 Average earnings mm for June: Expected 0.3%; Prior 0.3%
0830 Average earnings yy for June: Expected 5.0%; Prior 5.2%
0830 Average workweek hours for June: Expected 34.6 hrs; Prior 34.6 hrs
0830 Labor force participation for June: Prior 62.3%
0830 U6 underemployment for June: Prior 7.1%
1000 Wholesale inventory, R mm for May: Expected 2.0%; Prior 2.0%
1000 Wholesale sales mm for May: Expected 0.9%; Prior 0.7%
1500 Consumer credit for May: Expected $31.90 bln; Prior $38.07 bln

COMPANIES REPORTING
No major S&P 500 companies are scheduled to report for the day.​

CORPORATE EVENTS (Eastern Time)
0900 E2open Parent Holdings Inc: Annual Shareholders Meeting
1100 Spirit Airlines Inc: Shareholders Meeting

European shares are trading slightly lower and struggling to make gains after the shooting of Japan’s former prime minister caused a pullback in Asian shares, while investors waited for key U.S. jobs data later in the session
Euro STOXX 50 futures were up 1 point at 3,481, FTSE futures lost 27 points to 7,123, and German DAX futures were 6 points lower at 12,825, by 0430 GMT.

Japan’s Nikkei cut some of its early gains after Japan’s former prime minister Shinzo Abe was shot, and according to a report, had been taken to hospital bleeding after collapsing while delivering a speech.

Oil prices recouped losses, supported by worries over tight global supplies, though recession fears capped gains.


MARKETS AS OF 0430 GMT
S&P 500 Index Mini Futures: 3,891.25; down 0.35%; 13.75 points
DJIA Mini Futures: 31,279.00; down 0.28%; 88 points
Nikkei: 26,650.52; up 0.6%; 159.99 points
MSCI Asia, Ex-JP: 522.29; up 1.29%; 6.66 points
EUR/USD: $1.0150; down 0.11%; 0.0011 point
GBP/USD: $1.2014; down 0.07%; 0.0009 point
USD/JPY: 135.61 yen; down 0.29%; 0.40 point
Spot Gold: $1,740.70; up 0.06%; $1.08
U.S. Crude: $103.07; up 0.33%; $0.34
Brent Crude: $105.35; up 0.67%; $0.70
10-Yr U.S. Treasury Yield: 2.9817%; down 0.024 point
10-Yr Bund Yield: 1.2985%; up 0.014 point


GLOBAL NEWS
Scandal-ridden Boris Johnson announced on Thursday​ he would quit as British prime minister after he dramatically lost the support of his ministers and most Conservative lawmakers, but said he would stay on until his successor was chosen.

Japan’s former prime minister Shinzo Abe has died, hours after being shot while giving a speech in the western city of Nara on Friday. He was 67.

British employers slowed their hiring via recruitment agencies once again in June as vacancies increased at the weakest rate in more than a year, according to a survey that adds to signs that the labour market is losing some of its inflationary heat.


EUROPEAN COMPANY NEWS
EDF and the French government are seeking a new boss to overhaul the power utility and build more nuclear reactors, they said on Thursday, with billions in public money earmarked to help finance a full nationalisation of the debt-laden company.

Aero-engineer Rolls-Royce said it was playing a “long game” on winning orders to power Boeing‘s 787 Dreamliner after fixing most issues with its Trent 1000 engine, even though one final modification had been pushed out to next year.

Bayer AG and BASF have won a new trial on $60 million in punitive damages they were ordered to pay a Missouri peach farmer who said dicamba, a herbicide they produced, drifted onto his orchard and harmed his crops.


TODAY’S COMPANY ANNOUNCEMENTS
Fabege AB Q2 2022 Earnings Release


ECONOMIC EVENTS (All times GMT)
0645 France Current Account for May: Prior -3.4 bln EUR
0645 France Current Account – Balance NSA for May: Prior -0.51 bln EUR
0645 France Trade Balance SA for May: Expected -12.80 bln EUR; Prior -12.16 bln EUR
0645 France Imports for May: Prior 58.90 bln EUR
0645 France Exports for May: Prior 46.740 bln EUR
0700 Austria Industrial Production yy for May: Prior 9.1% 
0700 Austria Trade Balance for April: Prior -1,612.0 mln EUR
0800 Italy Industrial Output mm SA for May: Expected -1.1% ; Prior 1.6% 
0800 Italy Industrial Output yy WDA for May: Expected 4.0% ; Prior 4.2%