Markets Pause as Investors Digest This Week’s Developments

On a quiet morning for business news, equity markets have paused this morning as investors reflect on this week’s market action. US index futures are essentially flat trading between -0.1% and +0.1% coming off yesterday’s big gains of 3.0% for the NASDAQ, 2.1% for the S&P and 1.2% for the Dow that took indices to new all-time highs.

The Nikkei rallied another 2.1% overnight but overseas market action was otherwise quiet with Hong Kong, London and Frankfurt all basically flat. Germany joined a growing list of countries in technical recession reporting -0.2% GDP for last quarter, its second consecutive quarter of negative growth. The jury is still out, however, on whether this means the country is heading into a serious recession or bouncing around zero growth.

Investors continue to react strongly to earnings reports. Nvidia* finished yesterday with a 16.4% gain and is up a more moderate 1.3% in premarket trading this morning. Electric vehicle producer Rivian, on the other hand, plunged 25.6% yesterday on soft delivery numbers and is down another 2.6% this morning.

Booking Holdings* beat analyst expectations on earnings ($32.00 vs street $29.68), and announced it is launching a dividend but is down 7.1% premarket on what appears to be profit-taking against the news. Warner Bros Discovery is down 5.4% premarket after reporting disappointing results (-$0.16 vs street -$0.11).  

US and German treasury yields are holding steady this morning. There are no major economic announcements for North America today. Yesterday during the trading day, US Flash Manufacturing PMI and Flash Service PMI were both above 50 in expansion territory and US existing home sales beat expectations.   

Energy prices are falling back today with US Crude Oil down 1.8% and Natural Gas down 5.1%. Yesterday’s weekly inventory reports were supportive. Crude Oil inventories increased less than the week before, which was good, but not as much as hoped, while Natural Gas inventories decreased more than the week before, which was good, but not as much as hoped.  Metals action is mixed with Gold up 0.1% and Copper down 0.9%.

*Shares of Nvidia and Booking Holdings are held in some portfolios managed by SIA Wealth Management.

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