Morning Minutes 9/16/2020

Morning Minutes

FedEx, The Fed, Sales and Storms In Focus

September 16, 2020

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

US equity markets have been building on Tuesday’s gains of 1.2% for the NASDAQ and 0.5% for the S&P 500 this morning with NASDAQ, Dow and S&P futures up 0.2%-0.5% amid a number of developments.

FedEx is up 9.0% in premarket trading after posting stellar results with both EPS ($4.87 vs street $2.69) and revenues ($19.3B vs street $17.5B) coming in far above expectations. The surge in growth was driven mainly by a 31% increase in daily package volumes over a year ago with explosive growth in online retailing this year driving demand for package delivery.

US retail sales continued to recover but at a slower pace than expected. August retail sales grew 0.6% from the previous month, less than the 1.0% growth which had been expected. July sales growth was revised down to 0.9% from 1.2%.

Energy prices are spiking again this morning with WTI crude oil up 2.3% and gasoline up 1.5%. This move appears to be driven by Hurricane Sally in the Gulf of Mexico shutting in 25% of US offshore production. The impact of storms has historically been fleeting and investors should note that natural gas is already falling back with a 1.5% decline today. Oil may remain active through the week with OPEC meeting tomorrow.

The Fed meets today with their monetary policy announcements due at 2:00 pm EDT. With the US Presidential Election campaign underway, the central bank appears likely to remain on hold through this meeting and the next one in late October.  Investors may look to the statement for hints on how long rates may remain low or if negative rates are being considered. Because of this, the FOMC member economic forecasts may attract the most attention from investors looking for insight into the health of the US economy and its recovery momentum.

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