Chicago Business Barometer Rebounds More Than Expected In December

A report released by MNI Indicators on Friday showed a bigger than expected slowdown in the pace of contraction in Chicago-area business activity in the month of December.

MNI Indicators said its Chicago business barometer climbed to 44.9 in December from 37.2 in November, although a reading below 50 still indicates a contraction. Economists had expected the index to rise to 41.2.

The bigger than expected rebound came after the Chicago business barometer fell to its lowest reading since the 2008/09 global financial crisis, excluding the 2020 pandemic shock.

The report showed the new orders index jumped to 44.1 in December from 30.7 in November, reflecting a number of last-minute and year-end blanket orders.

The production index also rose to 39.2 in December from 35.9 in November, although MNI Indicators said material and staff shortages were cited as hampering production.

Meanwhile, MNI Indicators said the employment index slid to 40.8 in December from 47.1 in November, as firms struggled to replace employees that had retired or changed workplaces.

The report also showed the prices paid index fell to 64.1 in December from 66.2 in November, dropping to its lowest level since September 2020.

MNI Indicators said some firms are expecting higher labor costs, whilst others highlighted lower demand and falling oil and steel prices pushing prices down.

Gold Prices Mixed Ahead Of US Jobs Data

Gold prices were mixed on Friday after falling from a six-month in the previous session to snap a four-session winning streak.

Spot gold edged up 0.1 percent to $1,834.43 per ounce, while U.S. gold futures slipped 0.1 percent to $1,838.95.

The dollar held near an almost one-month high today after strong ADP private payrolls data and weekly jobless claims figures provided further evidence of a tight labor market and dashed hopes for a change to aggressive Fed policy anytime soon.

U.S. Treasury yields were mixed after rising the previous day as Fed members Esther George and James Bullard said that interest rates will stay higher for longer to tame inflation.

Focus shifted to the monthly U.S. jobs report due later in the day that could provide additional clues on how aggressive the Federal Reserve will be in tightening policy.

Economists currently expect U.S. employment to jump by 200,000 jobs in December after an increase of 263,000 jobs in November. The unemployment rate is expected to hold at 3.7 percent.

Traders will also keep an eye on reports on U.S. service sector activity and factory orders for clues to future economic trends.

Trinity Industries Acquires Holden America

Trinity Industries, Inc. (TRN), a provider of railcar products and services, Friday announced the acquisition of Holden America, a railroad equipment firm, for an initial price of $70 million, with an additional minimum of $5 million per year, for the next two years.

Jean Savage, Trinity’s CEO, said: “This acquisition fits well into our strategy to increase exposure to less cyclical and higher margin aftermarket parts…”

The acquisition was closed on December 30, 2022, and Trinity is not expecting any material impact on its financial results.

Pre-market Movers: SPRB, HKD, CTMX, FATE, ELOX…

The following are some of the stocks making big moves in Friday’s pre-market trading (as of 07.25 A.M. ET).

In the Green

Spruce Biosciences, Inc. (SPRB) is up over 85% at $2.32
AMTD Digital Inc. (HKD) is up over 74% at $52.18
CytomX Therapeutics, Inc. (CTMX) is up over 59% at $2.85
AMTD IDEA Group (AMTD) is up over 17% at $2.46
Magic Empire Global Limited (MEGL) is up over 16% at $2.67
Aehr Test Systems (AEHR) is up over 15% at $20.00
Tian Ruixiang Holdings Ltd (TIRX) is up over 14% at $3.73
Piedmont Lithium Inc. (PLL) is up over 11% at $53.92
World Wrestling Entertainment, Inc. (WWE) is up over 9% at $78.56
Turkcell Iletisim Hizmetleri A.S. (TKC) is up over 8% at $5.01
Lemonade, Inc. (LMND) is up over 6% at $14.99

In the Red

Fate Therapeutics, Inc. (FATE) is down over 50% at $5.40
Eloxx Pharmaceuticals, Inc. (ELOX) is down over 18% at $3.5
Silvergate Capital Corporation (SI) is down over 15% at $10.68
XPeng Inc. (XPEV) is down over 10% at $10.70
Kala Pharmaceuticals, Inc. (KALA) is down over 9% at $33.10
NIO Inc. (NIO) is down over 6% at $10.14

Southwest Airlines Expects To Report Net Loss In Q4

Southwest Airlines Co. (LUV), which went through massive flight cancellations amid severe winter storm and scheduling issues in late December, said Friday that it expects to report a net loss in fourth quarter 2022, as a result of the operational disruptions.

The fourth quarter result is hurt by a preliminary estimated fourth quarter 2022 pre-tax negative impact in the range of $725 million to $825 million. A significant portion of this impact is from an estimated revenue loss in the range of $400 million to $425 million. The remaining impact relates to an estimated net increase in operating expenses, primarily due to estimated travel expense reimbursements to Customers.

The Airline said that it canceled more than 16,700 flights from December 21, 2022 through December 31, 2022.

The company’s preliminary estimate of fourth quarter 2022 available seat miles (capacity) is a decline of about 6 percent, as compared with fourth quarter 2019, which is roughly 4 points lower than previous guidance.

Linde Buys NexAir; Stock Down In Pre-market

Linde Plc (LIN), a chemical firm, said on Friday that it has acquired the remaining 77.2 percent interest in nexAir, LLC, a packaged gas distributor, for an undisclosed sum.

Linde has been holding a minority interest in nexAir through Linde Gas & Equipment Inc. since 2012.

The acquisition complements Linde’s existing packaged gas business and expands its footprint in a core and fast-growing geography across the southeastern U.S.

For 2022, nexAir has reported sales of around $400 million.

LIN is trading down by 0.26 percent at $304.70 per share in pre-market on the New York Stock Exchange.