North American Morning Briefing: Stock Futures -2-

The Japanese energy company said it would buy all outstanding shares from Goldman Sachs Asset Management’s infrastructure fund and an affiliate of Singapore’s GIC Private Ltd.

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Oil Price Jumps Above $80 and Natural Gas Races Higher, Turbocharged by Supply Shortages

The extended climb in oil prices is leaving some other industrial commodities behind, a divergence that reflects bets that energy supply shortages will offset any slowdown in the global economy.

U.S. crude rose more than 2% early Monday to a seven-year high of $81.50 a barrel, bringing its climb since the end of last October to more than 120%. If sustained, it will be the first time the U.S. oil benchmark closes above $80 a barrel since October 2014, when the shale revolution set off a multiyear slump in fossil-fuel prices.

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Investors Watch for Rising Costs in Earnings This Week

Third-quarter earnings season kicks off this week, with investors on the lookout for signs that rising costs will pose a problem for U.S. corporate profits this quarter and beyond.

What companies reveal about the impact of any supply-chain problems, labor shortages and the continuing pandemic could determine the tone of trading, following a month of ups and downs that have pushed the S&P 500 down 3.2% from its September record. Already, a handful of boldface-name firms have said they are struggling with the crosscurrents of an unusual economic expansion, sending their shares lower and raising concerns that further surprises might await.

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Soaring Energy Prices Raise Concerns About U.S. Inflation, Economy

The U.S. economy is facing a new threat: rising energy prices.

Crude oil has risen 64% this year to a seven-year high. Natural-gas prices have roughly doubled over the past six months to a seven-year high. Heating oil has risen 68% this year. Prices at the pump are up nearly a dollar over the past 12 months to a national average just over $3 a gallon. Coal prices are at records.

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Tariff Relief Plan From Biden Administration Falls Short, Businesses Say

WASHINGTON-U.S. businesses are panning the Biden administration’s new China trade policy, saying it fails to provide the tariff relief they expected for importers who lack cost-effective alternatives to Chinese products.

The complaints are coming from companies that rely on Chinese electronic components and other parts to manufacture goods, from retailers that import shoes and skirts from China, and from people including Michael Mojica, who owns a camping-gear company in Englewood, Colo.

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U.S.-China Trade Talks Take First Steps in Re-Engagement

WASHINGTON-The Biden administration kicked off its trade-policy engagement with China late Friday with a virtual meeting between U.S. Trade Representative Katherine Tai and Chinese Vice Premier Liu He.

In the meeting, Ms. Tai raised a range of concerns including what the U.S. says have been China’s “state-led, nonmarket policies and practices” and its failure to live up to the commitments it made under the 2020 phase one trade pact signed with the Trump administration, according to senior administration officials.

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Derby’s Take: Fed Down Two Hawks as Regional Bank Presidents Depart

The number of Federal Reserve policy makers has dropped from 18 to 16, with potential implications for how the central bank communicates future policy changes.

On Friday, Federal Reserve Bank of Dallas President Robert Kaplan booked his last day leading the bank in a tenure stretching back to 2015. His exit follows the Sept. 30 accelerated retirement of Boston Fed leader Eric Rosengren, which was tied, officially, to health issues.

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Sharp Rise Brings Treasury Yields Near Spring Highs

A wave of selling has brought U.S. Treasury yields closer to their March highs, vindicating predictions that a long summer rally would fade in the face of stubborn inflation and a looming turn toward tighter monetary policies.

Yields, which rise when bond prices fall, have been on a sharp upward trajectory ever since the Federal Reserve’s Sept. 21-22 policy meeting. On Friday, a disappointing September jobs report briefly stalled the climb. But the yield on the 10-year note ended the session at 1.604%, its highest close since June.

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Risky Volatility Funds Set to Make a Comeback

Funds that track stock-market volatility are making a comeback, despite concerns they are too complicated for some investors.

Two new exchange-traded funds that let investors make leveraged or inverse bets on a popular barometer of market fluctuations are set to start trading later this fall. Similar products devastated investors in a high-profile blowup less than four years ago.

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China’s Xi Emphasizes ‘Peaceful Reunification’ With Taiwan, Days After Record Show of Force

Chinese President Xi Jinping called for a “peaceful reunification” with Taiwan days after China’s People’s Liberation Army sent a record 56 bombers and other aircraft on sorties near the self-ruled island in a single day.

Taiwanese President Tsai Ing-wen answered in a speech the following day, saying Taiwanese people would not bow to Chinese pressure.

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U.S. Charges Navy Engineer, Wife for Allegedly Trying to Share Military Secrets

WASHINGTON-A U.S. Navy employee and his wife have been charged with attempting to share secrets about nuclear submarine technology with a foreign country, according to court documents unsealed on Sunday.

The documents name the employee as Jonathan Toebbe and his wife as Diana Toebbe. Mr. Toebbe is a nuclear engineer, holds a top-secret clearance with the Department of Defense and has worked for the government for almost a decade, according to the documents.

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Bernie Sanders Expresses Frustration With Centrists in Spending Talks

WASHINGTON-Bernie Sanders has pushed Congress for decades to expand the social safety net and fight climate change, with limited success. Now, with Democrats on the brink of finalizing such a package, the Vermont senator must decide how much is enough.

The party is currently locked in negotiations over winnowing down a $3.5 trillion education, healthcare, child-care and climate plan, after Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona balked at the initial price tag. They are negotiating with the White House and Democratic leadership to find a compromise on what programs to fund and for how long, a process that has prompted increasing frustration from Mr. Sanders.

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Severe Drought Adds to Afghanistan’s Woes, Endangering Millions as Economy Collapses

KAJAKI, Afghanistan-Afghan farmer Niamatullah survived nearly two decades of conflict, growing beans, wheat and corn in Helmand province as war raged around him. When he finally decided to uproot his family and flee last month, it was because of the weather.

One of the worst droughts in decades in Afghanistan parched the fields of the 38-year-old, who goes by a single name, leaving his crops withered and worthless. He felt he had no choice but to pack his 15-member extended family into a rented truck and head out to search for day labor somewhere less desperate.

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Iraqi Election Could Determine the Future for U.S. Forces in the Country

BAGHDAD-Iraqis voted in a parliamentary election that could shape the future for U.S. forces still based there and indicate how Baghdad will navigate a broader geopolitical power struggle between Washington and Tehran.

Polls closed in the evening on schedule in Sunday’s election, which was brought forward as a concession to a protest movement that began in 2019. The election was dominated by the issues that triggered the upswell of dissent: an economic crisis and endemic corruption.

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Write to sarka.halas@wsj.com

TODAY IN CANADA

Earnings:

Nothing major scheduled

Economic Indicators (ET):

N/A Canada: Thanksgiving. Financial markets closed

Stocks to Watch:

Canada’s Pot Companies Are Missing the Best Party

Canadian marijuana companies started with big advantages over American ones, thanks to a fully legal home market. Now the slow pace of U.S. legalization risks turning them into bystanders.

Pot stocks have been on a downer for seven months as cannabis changes stall in Washington. Recent Democratic proposals for a legal overhaul are considered too ambitious to pass. Counterintuitively, this has hit the Canadian names hardest as they are locked out of the booming U.S. marijuana market until federal prohibition ends.

After a wild party early in the year when the Democrats took control of the U.S. Senate, shares in Canada’s most valuable listed cannabis company Canopy Growth have fallen by roughly two-thirds since mid-February. Another top name, Cronos Group, has more than halved.

The country’s pot growers are itching to expand south of the border, where data provider Headset expects the legal cannabis market to be more than five times as large as on their home turf by the end of 2022.

On Thursday, Canadian grower Tilray said plans to grow revenues to $4 billion by the end of its 2024 fiscal year are heavily dependent on being able to sell to U.S. smokers. The company reported a sales increase of 43% for the three months through August compared with the same period of 2020. While this sounds impressive, it was below what analysts were expecting, pointing to a slowdown in Canada.

Other News:

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Market Talk:

USD/JPY Could Rise to 113.00 on Pricier Crude

(MORE TO FOLLOW) Dow Jones Newswires

October 11, 2021 06:07 ET (10:07 GMT)

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