Morning Minutes 5/13/2020

Morning Minutes

Mixed Markets Await Powell Comments and Stimulus/Reopening Developments

May 13, 2020

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Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

World stock markets are mixed today as investors digest economic numbers out of the UK and await upcoming economic reports.

European markets are down this morning with the FTSE falling 0.8% and the Dax falling 1.25%. The UK reported a number of key economic figures this morning including which were poor but not as bad as feared, including Q1 GDP (-1.6% vs street -2.1%) and March industrial production (-8.2% vs street -9.3% and previous -3.4%).

US index futures are up 0.75% to 0.95% this morning as they try to bounce back from yesterday’s retreat with saw the three major indices fall about 2.0%. Dow futures are up about 190 points this morning after falling 457 points yesterday. Fed Chair Powell is scheduled to speak at 9:00 am EDT this morning. Investors may not only be looking to hear his assessment on the US economy and its rebound potential, but also on what tools the Fed could use in future, particularly whether negative interest rates are on the table or not.

Meanwhile, economies around the world continue to slowly reopen but it remains unclear how strong/fast or slow/weak a rebound may be. Because of this, any announcements from governments in the US and Canada related to additional fiscal stimulus may also attract attention.

WTI crude oil is steady just above $25.00/bbl while Brent Crude is up 0.5% trading just above $30.00/bbl. API weekly US inventories are still rising but at a slower pace (7.6 mmbbl vs previous 8.4 mmbbl). DOE weekly oil inventories are due at 10:30 am EDT with the street expecting a 4.1 mmbbl increase.

Earnings reports continue to be dominated by smaller companies but there are a couple of upcoming reports to note being Cisco Systems after the close today and Canadian Tire before the open tomorrow.


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