North American Morning Briefing: Stock Futures -2- –

Hospitals were hit hard financially by the costs of Covid-19, which crimped their ability to do high-margin elective procedures. Some firms took large government grants to help them make up for losses tied to the pandemic and for treating Covid-19 patients.


Fed’s Bostic Says Bond Buying Drawdown Near, Sees Rate Rise in Late 2022

Federal Reserve Bank of Atlanta President Raphael Bostic said Wednesday he has moved forward his expectations for a central bank rate rise to next year and that the time is coming soon for the Fed to pare its bond buying stimulus efforts.

“Given the upside surprises and recent data points, I’ve pulled forward my projection for our first move to late 2022,” Mr. Bostic said in a call with reporters. Mr. Bostic said he also expects two additional increases in the federal-funds rate in 2023. The Fed official had recently said he expected the first increase in 2023.


Yellen Says U.S. Could Breach Debt Limit Deadline in August if Congress Doesn’t Act

WASHINGTON-The U.S. could run out of room to keep paying the government’s bills some time during Congress’s August recess unless lawmakers raise or suspend the federal borrowing limit before then, Treasury Secretary Janet Yellen said Wednesday.

Congress in 2019 suspended the borrowing limit, or debt ceiling, through July 31, 2021. After that, the Treasury Department won’t be able to raise additional cash through the sale of government securities and would need to deploy emergency measures to keep paying the government’s obligations, as it has in the past.


Infrastructure Negotiators Agree to Framework for Package

WASHINGTON-Members of a bipartisan group negotiating a roughly $1 trillion infrastructure proposal said they had crafted a framework for an agreement, and lawmakers plan to meet with President Biden on Thursday to try to complete a deal.

The Democrats and Republicans emerged from a meeting with top White House officials Wednesday saying work would continue on some unresolved details.


German Business Sentiment Rises to Highest Level in More Than Two Years

German business sentiment improved again in June, reaching a more than two-year high as reopening boosted firms’ optimism on current conditions and expectations.

The Ifo business-climate index came in at 101.8 points in June compared with the 99.2 points registered in May, according to data from the Ifo Institute released Thursday. The reading beats the consensus forecast from economists polled by The Wall Street Journal, who expected the index to increase to 100.5.


Talking Markets: Miners Dig In as Shares Fall After Peru Election

Shares in mining companies operating in Peru have fallen since a general election in the country in which a far-left nationalist appears to have won the presidency, reflecting uncertainty over his approach to the industry.

Anglo American stock fell 16% in the two weeks since the second leg of the presidential election took place on June 6. The company and Mitsubishi Corporation have invested $5.3 billion in a copper mine named Quellaveco, in southern Peru, which is set to become one of the world’s largest copper pits when it starts operating next year.


New York City to Install First Curbside Electric-Vehicle Charging Station

New York City will install its first curbside electric-vehicle charging stations this year, part of an effort to address the dearth of charging options in the city.

The Department of Transportation said that by October it will install 100 charging ports for public use. Another 20 ports will serve the city’s fleet of electric vehicles.


NASA’s Perseverance Rover Is Looking for Life on Mars

NASA’s latest Mars rover is done with its testing and is ready to embark upon its first scientific mission. After landing on the planet in February, the Perseverance rover has been busy trying out its many instruments-converting atmospheric carbon dioxide into oxygen that would be needed for manned missions, flying a helicopter and taking photos.


Biden to Deter Forced Labor With Ban on China’s Solar Panel Materials

WASHINGTON-The Biden administration plans to broaden its campaign against the use of forced labor in China’s Xinjiang region by imposing penalties on some companies that produce raw materials used to make solar panels, according to people familiar with the plans.

Under the plans, to be announced Thursday, U.S. Customs and Border Protection would bar imports of metallurgical-grade silicon mined by Hoshine Silicon Industry (Shanshan) Co., as well as products made from it, unless the company can prove the material isn’t produced with forced labor, these people said.


Chinese Covid-19 Gene Data That Could Have Aided Pandemic Research Removed From NIH Database

Chinese researchers directed the U.S. National Institutes of Health to delete gene sequences of early Covid-19 cases from a key scientific database, raising concerns that scientists studying the origin of the pandemic may lack access to key pieces of information.

The NIH confirmed that it deleted the sequences after receiving a request from a Chinese researcher who had submitted them three months earlier.


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Economic Indicators (ET):

0830 Apr Payroll employment, earnings & hours

Stocks to Watch:

Video Software Company JW Player Raises $100 Million

Video technology company JW Player, which got a pandemic-driven boost in demand as people live-streamed everything from fitness classes to happy hours, has raised $100 million in new funding.

Midmarket private-equity firm LLR Partners is financing the deal, which gives the New York-based company capital to support its quest to become for video what online shopping platform Shopify Inc. is for e-commerce and cloud-based technology company Twilio Inc. is for communication.

Video has become a key way in how people — and businesses — communicate, a trend that accelerated during the pandemic, said David Reuter, partner at LLR Partners. “And we believe that over the next three to five years that trend is only going to increase,” he said.

Mr. Reuter and Jim Flynn, who has led three companies backed by LLR Partners, are joining JW Player’s board, with Mr. Flynn becoming the executive chairman.

*Dollarama Announces Private Offering of $750M Senior Unsecured Notes

Other News:

Canadian Stocks Look Cheap, BofA Says. Why They Could Be Cyclical Superstars. —

The Canadian stock market has been performing well, up an average 22% this year for U.S. investors. It’s still looking cheap, and could outperform the U.S. market as a cyclical recovery gains momentum.

While the S&P 500 has gotten pricey at 21 times forward earnings, the S&P/ TSX Composite, a broad index of Canadian stocks, trades at 17 times earnings. That’s below the average valuation difference between the two markets, and it’s the steepest discount to the U.S. since the tech bubble, according to Bank of America strategists Ohsung Kwon and Savita Subramanian.

When Canadian stocks have been this cheap, they have outperformed the S&P 500 by an average of 8.4 percentage points, beating the U.S. 63% of the time, BofA says.

Canada’s equity market tilts heavily to cyclical sectors such as commodities, energy, materials, and financials. Cyclicals account for 70% of the Canadian market, compared with 25% of the S&P 500. Financials comprise about 36% of the Toronto Stock Exchange (TSX), followed by energy stocks at 14%, tech at 13%, and materials at 11%.

The Canadian dollar, known as the loonie, is up about 10% over the past year versus the U.S. dollar. That might be tough on Canadian exporters, but it has lifted returns for U.S. investors in Canadian equities. While the S&P/TSX has gained 30% in the last year, U.S.-listed exchange-traded funds that focus on the Canadian market have jumped about 47%.

A stronger Canadian dollar historically lifts the multiple of its stock market, too. BofA estimates that the Canadian market could rerate 20% higher relative to the U.S., if historical patterns hold.

The Canadian dollar has been rallying with commodity prices, gaining more than 3% against the U.S. dollar this year, making it a top performing currency.

Canada’s economy could also perk up as the country catches up on vaccinations and gradually reopens, lifting services and other sectors.

Indigenous Group in Canada Says Hundreds of Unmarked Graves Discovered

An Indigenous community in western Canada said it found hundreds of unmarked graves near a former boarding school less than a month after a similar discovery shocked the country and reignited a nationwide discussion about Canada’s treatment of Indigenous people.

The Federation of Sovereign Indigenous Nations, which represents 74 First Nations in the Canadian province of Saskatchewan, issued a statement that said it would provide more details about the discovery during a Thursday press conference alongside the Cowessess First Nation, which is located about a hundred miles east of Regina. It didn’t specify how many graves had been found but called the discovery “the most significantly substantial” so far in the country.

The announcement comes several weeks after the Tk’emlps te Secwépemc First Nation near Kamloops, British Columbia, said it had discovered the remains of 215 children in the area of a former government-funded boarding school. The discovery sparked calls to search for more unmarked graves at the sites of some of the roughly 150 former residential schools across Canada.

Market Talk:

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Expected Major Events for Thursday

05:00/JPN: May Supermarket sales

06:45/FRA: Jun Monthly business survey (goods-producing industries)

08:00/GER: Jun Ifo Business Climate Index

08:59/JPN: Jun Monthly Economic Report

11:00/UK: Agents’ Summary of Business Conditions

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June 24, 2021 06:10 ET (10:10 GMT)

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