Morning Minutes 12/3/2020

Morning Minutes

Markets Pause with OPEC+, Bank Earnings, and Employment In Focus

December 3, 2020

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

Stock markets around the world are steady this morning as investors digest a flurry of overnight developments. The Nikkei, Dow Futures (still just under 30,000) and S&P futures (coming off an all-time high close) are flat. NASDAQ futures are up 0.3%, the Hang Seng rose 0.7% and the Dax is down 0.5%.

Today’s main event so far is the start of the OPEC+ meeting which was postponed from Tuesday as several major producing countries continue to haggle over whether or not to continue with planned supply increases scheduled for January, slow them down or extend current supply cuts. OPEC leaders didn’t get anywhere this week so now the wider group is taking a crack at it. WTI and Brent crude oil are both down 0.2% this morning as investors await a decision.

Meanwhile in the US, budget/stimulus talks continue ahead of the Friday December 11th deadline to avert a government shutdown.

Canadian bank earnings week wraps up today with more positive results. Both TD Bank ($1.60 vs street $1.27) and CIBC ($2.79 vs street $2.52) posted adjusted EPS well above analyst expectations. Both banks attributed their strong results to a great quarter for their capital markets divisions, steady results from Canadian banking and smaller loan loss provisions while noting struggles at their international businesses.

Employment news continues to move into the spotlight as the week progresses. Offsetting yesterday’s disappointing ADP payrolls, today’s US unemployment reports came in better than expected both for initial jobless claims (712K vs street 775K and previous 787K) and continuing claims which fell below 6.0M to 5.5M which was better than the 5.9M street estimate. Tomorrow, US nonfarm payrolls (street 481K vs previous 638K) and Canada jobs (street 20K vs previous 63K) are scheduled for release at 8:30 am EST.

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