Morning Minutes 11/17/2020

Morning Minutes

Retail Sales, Retailer Earnings and Online Retail Competition In Focus

November 17, 2020

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

Equity markets saw the euphoria over yesterday’s vaccine results from Moderna fade away overnight and have turned back downward this morning. Coming off a day which saw the Dow Jones Industrial Average and the S&P 500 finish at record closing highs but just short of the intraday highs set last week, and 50 points short of Dow 30,000, Dow Futures are down  over 200 points or 0.7% and S&P 500 futures are down 0.6%. On the other hand, NASDAQ are up 0.3%.

Overseas trading has also been mixed, with the FTSE down 1.2%, the Dax down 0.3%, and the Nikkei up 0.4%. Metals are also under pressure with copper and silver falling 0.4% while gold is flat. WTI and Brent Crude oil are both down about 0.2% and investors await news from today’s OPEC+ energy ministers meeting who are set to discuss whether to allow production quotas to start rising in January or to maintain current production cuts for longer.

Tesla Motors has attracted renewed attention overnight on the news that it is going to be added to the S&P 500 on December 21st. Its shares are up 13.0% in premarket trading.

The main focus of today’s equity market news has been on the retailing sector. US retail sales rose only 0.3% over month in October  which was a significant slowdown in momentum from September’s 1.9% monthly growth rate, and less than the 0.5% street estimate.

Retail earnings season has started in earnest today with Walmart beating the street on EPS ($1.34 vs street $1.18), same store sales (6.4% vs street 3.9%) and revenues ($134.7B vs street $132.2B) driven by a 79% increase in online sales. Home Depot also beat street estimates on EPS ($3.18 vs street $3.06) and same store sales (24.1% vs street 16.9%). Costco, meanwhile, declared a $10.00 per share special dividend.

Meanwhile, there appear to be signs of upheaval in the drug store sector. Amazon.com announced that it is launching an online pharmacy in the US today. While Amazon is up 2.0% in premarket action, traditional drug store competitors have seen their shares plunge in premarket action including Walgreens Boots falling 10.4%, CVS dropping 7.4% and Rite-Aid diving 11.3%.

 

 

Support Team SIA Motacular Moustaches This Movember

 

This month, in support of men’s health, SIA team members are participating in the Movember charity fund-raising campaign. Many of us know someone who has fallen ill to prostate or testicular cancer, mental illness or have passed away in recent years and are looking for a way to give back. The funds we help Movember raise will support life-changing services for mental health, innovative research, and scientific breakthroughs for cancer care. We know it has been a difficult year for everyone; if you are interested and able to support the cause this year, please click on the link below to access our team’s site. https://ca.movember.com/team/2383675

 

Best Regards, Jeremy Fehr and the Motacular Moustaches team.

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