Morning Minutes 7/29/2020

Morning Minutes

Flat Markets Digest Earnings While Awaiting Tech Testimony and Fed Decision

July 29, 2020

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

Stock markets are steady this morning with US index futures up 0.3% to 0.6% while over in Europe, the Dax is up 0.1% and the FTSE is up 0.2%. Copper is up 0.1% but precious metals are stronger with gold rising 0.5% to trade near $1,950/oz. Crude oil is picking up today with WTI gaining 1.1% and Brent up 1.3% after API reported a 6.8 mmbbl drawdown in US weekly oil inventories.

It’s a busy day for earnings reports on both sides of the border. Shopify* is up 9.7% in premarket trading after reporting a 97% increase in sales over a year ago to $714M which was well above the $514M street estimate.

Other companies who beat expectations include: Visa ($1.07 vs street $1.03), General Motors (-$0.50 vs street -$1.77), Advanced Micro Devices ($0.18 vs street $0.16), eBay ($1.08 vs street $1.06), Amgen ($4.25 vs street $3.82) and Starbucks (-$0.46 vs street -$0.59).Enbridge with EPS of $0.41, met expectations. Several companies reported worse than expected results including Boeing (-$4.79 vs street -$2.54) and General Electric (-$0.15 vs street -$0.10). Meanwhile retailer L Brands announced plans to lay off 15% of its corporate staff.

A number of companies are expected to report results after the close today including Facebook, Sierra Wireless, Qulacomm, Fitbit, Agnico-Eagle, and Kinross Gold.

Developments in Washington could also potentially influence trading today. CEOs of several technology companies including Apple, Alphabet (Google), Facebook, and Amazon.com* are scheduled to testify to congressional anti-trust hearings today which could potentially impact NASDAQ sentiment. The Fed’s latest monetary policy decision is due at 2:00 pm EDT today. The street is not expecting any significant moves from the central bank but may look to comments in the statement or Chair Powell’s press conference for hints about the current state of the US economy and whether the Fed is considering taking additional action in future.

*Shares of Shopify and Amazon.com are held in some portfolios managed by SIA Wealth Management.

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