North American markets appear set to build on yesterday’s bounce with US index futures rising 0.45% to 0.75% as they look to add to yesterday’s US index gains of 0.55% to 1.35%. Over in Europe, the FTSE is up 0.4% and the Dax is up 0.2%. Chinese markets continue to struggle with the Hong Kong falling 0.5%, but Sydney and Tokyo managed gains of 1.0% and 1.4% respectively.
These gains have occurred despite increasing headwinds from rising traded interest rates. The US 10-year treasury note yield has taken a run at 4.15%, while the German 10-year bund yield has climbed above 2.25%. Economic news has been disappointing so far today. Canada retail sales (-0.2% vs street 0.0%), Canada retail sales excluding autos (-0.5% vs street -0.1%), and UK retail sales (-3.2% vs street -0.5% and previous 1.4%) all dropped off more than expected. US consumer sentiment and existing home sales are due at 10:00 am EST.
Overnight earnings reports have been dominated by US regional banks, most of whom posted disappointing results. The street has reacted positively, however to results from insurance giant Travelers, which is up 4.9% premarket, and asset manager State Street, which is up 5.1% premarket.
While earnings season has been dominated by banks so far, and confession season has been quiet, one trend that has emerged/accelerated this year has been companies laying off workers. Yesterday and this morning, Google, Macy’s and Wayfair have announced new rounds of layoffs which is interesting when considering that it was positive unemployment claims news that sparked yesterday’s market bounce.
Energy prices are lower this morning with US Crude Oil down 0.3% and Natural Gas down 2.5%. A smaller than expected drawdown in natural gas storage despite last week’s deep freeze appears to be weighing on that market. In metals action, Copper and Gold are both up about 0.75%