Chinese markets rebounded for a second straight day, with Hong Kong and Shanghai gaining 3.5% and 1.8% respectively. This positive momentum has carried into Europe where the Dax is up 1.3% and the FTSE is up 0.4%. US index futures are up 0.4%-0.9% this morning.
Equity markets have responded positively to better-than-expected Flash Manufacturing PMI data from Japan, Australia, Europe and the UK suggesting that the world economy may be off to a strong start to the year. US Flash Manufacturing (street 47.9) and Flash Services (street 51.0) are due at 9:45 am EST.
The Bank of Canada releases its latest interest rate decision, statement and Monetary Policy Report at 9:45 am EST, followed by Governor Macklem’s press conference at 10:30 am. Note that these are new, earlier times than last year. While the bank is expected to hold interest rates steady and continue shrinking its balance sheet, investors may look for comments on the economy and inflation for hints on if or when the Bank may start to cut rates.
The response to last night’s round of earnings reports has been mixed. Netflix* is up 9.9% in premarket trading as investors cheered stronger than expected revenues and subscriber growth (13.1 million increase vs guidance 8-9 million increase) and downplayed a miss on earnings. Texas Instruments, on the other hand, the first semiconductor stock to report results, is down 3.2% in premarket trading as investors focused more on management comments related to weakening demand from the auto and industrial sectors and weaker than expected guidance over a small earnings beat.
Canadian National Railway beat expectations ($2.02 vs street $1.99). US railroads start to report results as well led by CSX tonight and Union Pacific tomorrow morning. Other notable companies releasing results after the close include Tesla, IBM, ServiceNow* and Lam Research*.
*Shares of Netflix, ServiceNow and Lam Research are held in portfolios managed by SIA Wealth Management.