Morning Minutes 11/08/2018

Big Day for Canada Earnings; Fed Decision This Afternoon
SIA Wealth White BG

November 8, 2018
8:45 am EDT

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Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

Although US earnings season is winding down, Canada is still going full force with a number of announcements out today that could potentially get investors’ attention. Highlights of this morning’s results include:

Bombardier                Adjusted EPS of $0.04 above street $0.02. Selling Q400 turboprop business and training division for $900 million combined; planning to lay off 5,000 employees.

Magna International       Adjusted EPS of $1.56 above street $1.51, sales of $9.62B up 8% over year

Canadian Tire             Adjusted EPS of $3.47 above street $2.85, 15.2% dividend increase

Telus                     Adjusted EPS of $0.74 above street $0.59, dividend increase

 

Outside of Canada, markets have been mixed. Yesterday’s 2.0% plus gains for US indices carried upward momentum into Asia Pacific trading where the Nikkei rallied 1.8%. In Europe today, the FTSE is up 0.5% while the main continental indices are essentially flat. Dow Futures have been trading down about 40 points or 0.1% as US markets digest yesterday’s rally.

US treasury yields and the US Dollar are also steady this morning, suggesting that US investors are reluctant to make any commitments ahead of this afternoon’s (2:00 pm EDT) Fed interest rate decision. Having raised rates at its last meeting, the FOMC is widely expected to do nothing today but raise again at its next meeting in December. The statement, could attract attention from investors looking for hints on how many rate hikes to expect in 2019, what level the Fed may consider stopping at, and if Governor Powell has any comments on rising US wage inflation which could force the Fed to remain hawkish for longer.

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