Morning Minutes 10/14/2020

Morning Minutes

Mixed Markets Digest Earnings Reports

October 14, 2020

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

After Day 1 of this quarter’s earnings season saw US indices stage moderate pullbacks of 0.1%-0.6% on Tuesday, overnight trading has been mixed as investors work through more results. This morning, US index futures are mixed ranging from a 0.1% decline for S&P futures to a 0.2% increase for NASDAQ futures. Overseas, the FTSE and the DAX are both down 0.25%, while mixed Asia Pacific trading saw Tokyo climb 0.1% and Shanghai fall 0.5%.

Gold has regained $1,900/oz with a 0.5% gain this morning while Silver is up 0.7%. In commodity action, natural gas has plunged 5.6%, gasoline is down 1.0%, while WTI crude oil is down 0.4%, holding just above $40.00/bbl. Copper is climbing today with a 0.25% gain.

Day 2 of earnings season brings more results from national and regional banks and brokerages, several of whom beat the street including: Goldman Sachs ($9,68 vs street $5.57), Bank of America ($0.51 vs street $0.49), US Bancorp ($0.99 vs street $0.91) and PNC Financial ($3.39 vs street $2.12). Notably, Bank of America, Goldman, and PNC reported significantly smaller loan loss provisions for the quarter. Goldman Sachs saw strength in investment banking, trading and asset management. Wells Fargo reported EPS below expectations ($0.42 vs street $0.45), but also significantly reduced its loan loss provision ($0.76B vs street $1.76B and previous $9.5B).

In other news, UnitedHealth also exceeded expectations on earnings ($3.51 vs street $3.09). Later today, results are due from Alcoa and United Airlines, while Morgan Stanley headlines tomorrow morning’s numbers. Economic news is light today focused on US and Chinese inflation, tomorrow brings US weekly jobless claims followed by US retail sales on Friday.

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