Morning Minutes 9/9/2020

Morning Minutes

Bank of Canada, Vaccine News, and Lululemon Earnings In Focus

September 9, 2020

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

US index futures and European indices are on the rise this morning, with investors stepping back in following a three trading day correction that saw the NASDAQ Composite fall 10.0% (Tuesday Sept 8 close vs Wednesday Sept 2 close), the S&P 500 fall 6.9% and the S&P/TSX Composite slip 3.5%. Coming off a down session for Asia Pacific indices, European bourses have turned the corner with the Dax rising 1.1% and the FTSE rising 0.9%. US index futures are also in the green today with NASDAQ up 1.6%, S&P up 0.7% and Dow up 113 points or 0.4%.

This rebound appears encouraging coming in the face of mixed corporate news. Vaccine stocks are active in premarket action after AstraZeneca (down 1.7% premarket) paused clinical trials of its COVID-19 vaccine following reports of adverse reactions. Some competing vaccine providers are up in early trading including Moderna with a 4.5% premarket gain so far.

Athletic clothier Lululemon is down 4.5% in premarket trading this morning. The company beat the street on earnings ($0.74 vs street $0.66) as a 155% increase over year in online sales boosted overall revenues to 2% growth over year. Management indicated they are cautiously optimistic about the second half of the year but did not provide any guidance beyond suggesting marketing expenses could increase and more pop up stores are planned for the upcoming holiday season.

The Bank of Canada meets today with its decision and statement due at 10:00 am. It appears unlikely the central bank may consider any moves before the upcoming Throne Speech and fiscal plan from Canada’s new Finance Minister. Still investors may look to the statement for an update on the health and outlook for the Canadian economy. Today August housing starts were reported well above expectations (262K vs street 220K).

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