Morning Minutes 12/9/2020

Morning Minutes

Earnings, IPOs and Bank of Canada In Focus

December 9, 2020

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

Following yesterday’s all-time highs for some of the major US indices, US index futures are mixed this morning with Dow Futures up 0.2% and NASDAQ futures down 0.1%. Some of the major themes that have been underpinning stocks in recent weeks continue including the rollout of Pfizer’s vaccine in the UK, the pending FDA decision on US approval, and progress toward a US stimulus/spending deal ahead of government shutdown/program expiry deadlines. Also, President Trump lost another legal challenge on election results ahead of next week Electoral vote.

Investors often look to the appetite for initial public offerings as an indicator of confidence and willingness to take on risk in unproven stocks. This week provides two high-profile examples for investors to chew on. DoorDash starts trading today after completing a $38B, $102 per share offering which was priced above the projected $90-95 range, a sign of strong investor demand. AirBnB’s IPO and trading debut are expected later this week.

In earnings news this morning, discount retailer Dollarama beat the street on sales ($1,060M vs street $995M), on same store sales growth of 7.1%, plus management raised the company’s dividend by 6.5%. Later today, results are due from Roots, with lululemon, Empire and Costco reporting tomorrow.

The latest Bank of Canada decision is due at 10:00 am EDT. No changes to monetary policy are expected, but investors may look to the commentary for analysis of current economic conditions, the winter outlook as more parts of the country are locked back down, and hints on future monetary policy. The central bank has been scaling back asset purchases lately, so any comments related to the interest rate or asset purchase outlook could attract attention from the street.

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