Morning Minutes 6/12/2020

Morning Minutes

Stocks In North America and Europe Bounce Back

June 12, 2020

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

Although Asia Pacific trading overnight saw some follow-through from yesterday’s North American selloff, losses moderated and the pendulum has started to swing back toward the bullish side this morning. Yesterday’s 6.9% decline for the Dow moderated to a 0.75% decline for the Hang Seng overnight, while this morning, the Dax is up 0.75%, the FTSE is up 1.0% and Dow futures are up 434 points or 1.75%. Commodity and currency action has been mixed. WTI crude oil is flat, but copper is up 0.9%. Gold is up 0.25% but other havens for capital such as the US Dollar and the Japanese Yen are down today.

With no major economic news overnight, it appears that the recent correction has run its course and bargain hunters have stepped into a market that has bent but not broken so far. It will be interesting to see as the day evolves if the bears return ahead of the weekend, if bulls continue to mount a defense, and how investors may respond (or not) to today’s US coronavirus case count numbers.

There have been some earnings reports of note overnight. Lululemon* reported EPS of $0.22, a penny below street estimates on sales of $651M, which was down 17% over year and short of the $688M the street was expecting. Management did not release same store sales but did indicate that online sales soared 125% in April and jumped to 54% of total sales in the quarter. Adobe, meanwhile, exceeded expectations on EPS ($2.45 vs street $2.33).

*Shares of Lululemon are held in some portfolios managed by SIA Wealth Management.

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