Mixed Earnings And Economic Reports; Neutral Holds From Central Banks

Between yesterday and today, the Bank of Canada and the European Central Bank have issued “Neutral Hold” decisions. While maintaining current interest rates, in their statements, both central banks hinted that they are likely done raising interest rates, but at the same time, gave no indication that they are considering rate cuts any time soon either, essentially confirming progress on containing inflation but holding off on declaring victory.

In the wake of these announcements, treasury yields continue to rebound with the US 10-year treasury note yield trading above 4.15% and the German 10-year Bund yield climbing toward 2.35%. European stock markets are down this morning, with the FTSE falling 0.25% and the Dax dropping 0.5%.

Coming off of yesterday’s US split decision that saw the NASDAQ rise 0.35% but the Dow fall 0.25%, US index futures are mixed with NASDAQ futures up 0.30%, but Dow Futures down 0.15%. US Q4 GDP beat expectations, slowing less than expected (3.3% vs street 2.0% and Q3 4.9%), but weekly initial jobless claims (214K vs street 200K and previous 189K) and US durable goods orders (0.0% vs street 1.1%) were worse than expected.

Mixed sentiment in US indices can also be seen in the market reaction to overnight earnings reports. Tesla is getting hammered after its earnings came out below expectations ($0.71 vs street $0.73, down 9.0% premarket) IBM, on the other hand, beat the street and is up this morning ($3.87 vs street $3.79, up 6.5% premarket).  Intel* and Visa headline results due after the close today, followed by American Express tomorrow morning.

Energy markets are in rally mode this morning with US Crude Oil up 1.2% and Natural Gas up 5.6%. Oil is benefitting from big US inventory drawdowns; natural gas storage is due at 10:30 am EST today. Although Chinese equity markets rallied again overnight with Shanghai climbing 3.0%, that didn’t extend into Copper, which is down 0.2%. Gold is flat while Bitcoin is up 0.5%.

*Shares of Intel are held in portfolios managed by SIA Wealth Management.

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