North American Morning Briefing : Stocks to Fall -2-

April 25, 2022 at 05:52 am EDT

But there's a catch: Even in normal times, no one knows where this theoretical level is. And these aren't normal times. There are good reasons to think the ground beneath the central bank's feet is shifting and that, after accounting for elevated inflation, neutral may be higher than officials' recent estimates.

Maybe There Is an Alternative: Wall Street Finds New Value in Cash

Worries about the war in Ukraine, China's Covid-19 outbreak, a U.S. or European recession and surging global inflation are making a long-spurned asset increasingly popular with Wall Street's top money managers these days: cash.

As stock and bond prices have retreated from records in the tumult of headlines, more asset managers said they are looking to move funds into low-risk, cash-like assets. That marks a shift from recent years, when steadily climbing equity indexes trained investors to buy every dip and not miss out on gains by holding cash.

Beijing Braces for Omicron Wave With Hoarding and Testing

TAIPEI-Beijing residents stocked up on essentials in anticipation of a possible lockdown as China's capital began mass Covid-19 tests of people living or working in the city's Chaoyang district, a favored location for foreign multinationals, embassies and global media organizations.

Municipal officials mandated three rounds of mass testing this week for Chaoyang's 3.5 million people after the city reported 19 new cases on Monday, down three from a day earlier.

Japanese Yen's Drop Raises Potential for Broader Market Trouble

The Japanese yen has dropped to a 20-year low against the U.S. dollar. That risks being bad news far beyond Tokyo-in the $23 trillion market for U.S. Treasurys.

Traders around the world watch the yen's rise and fall not just to follow Japanese markets but also to gauge how investors globally are feeling. Usually, when markets are rallying, the yen tends to weaken against other currencies. When markets get turbulent, the yen tends to gain ground.

Higher Oil Prices Have Yet to Lure Back Secondary Buyers

Improvements in oil prices over the past year may be bolstering cash flows at some private equity-backed oil-and-gas companies but it hasn't lured secondary buyers back to bid for interests in funds focused on the sector, at least not yet.

"You can't trade private-equity energy funds off of spot oil prices," said Michael Dean, managing director in the real assets team at HarbourVest Partners, adding that higher oil prices have made companies more profitable but have yet to contribute to a significant uptick in exits by oil-and-gas funds.

Iron Ore, Steel Futures Slump on China Lockdown Fears

Iron ore and steel futures slump as demand expectations are weighed by Shanghai's extended lockdown and fears that other parts of China, including Beijing, may be subject to similarly harsh curbs.

The most-traded September iron ore contract on the Dalian Commodity Exchange fell as much as 11% on Monday. They were recently 8.4% lower at 815.0 yuan ($125.35) a metric ton. Iron ore futures in Singapore also declined by as much as 11% in response to the negative sentiment and were recently 6.2% lower at $141.40 a ton.

German Business Confidence Unexpectedly Rises, Ifo Says

Business confidence in Germany has stabilized at a low level, following a sharp drop in the previous month due to high energy prices and uncertainty from the Ukraine war.

The Ifo business-climate index rose to 91.8 points in April from 90.8 points in March, according to data from the Ifo Institute released Monday. Economists polled by The Wall Street Journal expected the index to decrease to 89.1.

Workers Are Changing Jobs, Raking In Big Raises-and Keeping Inflation High

Job-switchers are often reaping double-digit pay increases, a new survey shows, a phenomenon that is demonstrating bargaining power for workers while threatening to keep inflation high.

About 64% of job-switchers said their current job provides more pay than their previous job. Among these workers, nearly half received a raise of 11% or more, according to a ZipRecruiter survey provided exclusively to The Wall Street Journal. Nearly 9% are now making at least 50% more.

These Stocks Got Hot During the Pandemic. Now They're Cooling.

The pandemic spawned a new universe of stock-market stars. Some are now coming back to Earth.

The onset of Covid-19 changed the way people worked, shopped and dined, helping companies such as videoconferencing star Zoom Video Communications Inc. and at-home workout provider Peloton Interactive Inc. soar. But as restrictions eased and vaccines became widely available, certain consumer behaviors tilted back to prepandemic norms, offering new threats to businesses that thrived in 2020 and 2021.

How Goldman Sachs Is Encouraging Companies to Disclose Emissions Data

Companies are facing more stringent environmental, social and governance requirements leading into proxy season.

The Securities and Exchange Commission recently proposed new rules that would require public companies to provide information to investors about their exposures to risks stemming from greenhouse-gas emissions and other climate-change-related issues. Institutional investors are now asking for more information, with some requests happening ahead of annual shareholder meetings that often occur in the spring.

Shanghai Lockdown Bolsters a Fringe Independence Movement

Stewing resentment over a government lockdown in Shanghai is bolstering a fringe idea: independence for China's most cosmopolitan city.

Over much of the past month, as the world has shed Covid-19 restrictions, 25 million Shanghainese have been confined to their homes to crush an outbreak. The paralysis of China's richest city has astounded its urbane residents, who are normally spoiled for choice with 100,000 restaurants but are now scrounging for food.

U.S. Wants to See Russia Weakened, Says Defense Secretary Austin

U.S. Defense Secretary Lloyd Austin said Russia's military capabilities should be degraded after he and Secretary of State Antony Blinken met with Ukraine's President Volodymyr Zelensky and announced more U.S. military aid to the country.

"We want to see Russia weakened to the degree that it can't do the kinds of things that it has done in invading Ukraine," Mr. Austin said Monday after the highest-level visit of U.S. officials to Kyiv since Russia invaded Ukraine on Feb. 24. Mr. Blinken said: "Russia is failing, Ukraine is succeeding."

Pandemic Border Policy Could Complicate Covid Relief, Ukraine Bills

WASHINGTON-When Congress returns this week, a pandemic-era immigration policy could complicate efforts to pass further coronavirus relief legislation and possibly another Ukraine aid measure if centrist Democrats side with Republicans in opposing the Biden administration's repeal of the border rules.

Earlier this month, the Biden administration said that in May it will end its use of Title 42, a controversial policy dating to the Trump administration that allows Border Patrol agents to quickly turn away migrants at the southern border.

France's Emmanuel Macron Wins Second Term in Presidential Election

PARIS-French President Emmanuel Macron was re-elected by a wide margin, according to projections based on early ballot counts, overcoming deep divisions among voters worried about inflation, the war in Ukraine and the impact of immigration on France's national identity.

Mr. Macron garnered 58.8% of the estimated vote Sunday, while far-right leader Marine Le Pen won 41.2%, according to a projection from polling firm Ipsos.

European Wind-Energy Sector Hit in Wave of Hacks

Cyberattacks on three European wind-energy companies since the start of the war in Ukraine have raised alarm that hackers sympathetic to Russia are trying to cause mayhem in a sector set to benefit from efforts to lessen reliance on Russian oil and gas.

The companies attacked haven't publicly attributed the hacks to a particular criminal group or country and Russia has consistently denied that it launches cyberattacks.

Write to paul.larkins@dowjones.com TODAY IN CANADA

Earnings:

None scheduled

Economic Indicators (ET):

1100 Bank of Canada Governor Tiff Macklem appears before the House of Commons Standing Committee on Finance

Expected Major Events for Monday

05:00/JPN: Feb Indexes of Business Conditions - Revision

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

05:30/JPN: Mar Nationwide department store sales

08:00/GER: Apr Ifo Business Climate Index

10:00/UK: Apr CBI Industrial Trends Survey

12:30/US: Mar CFNAI Chicago Fed National Activity Index