Bank Credit Provisions and Durable Goods Orders Disappoint Investors

World markets are off to a choppy start to the week, US index futures are trading flat to up 0.2%, basically clawing back yesterday’s US index losses of 0.1%-0.4%. Over in Europe, the FTSE is down 0.1% while the Dax is up 0.4%. The US 10-year treasury note yield is steady just above 4.25%, while the 10-year German Bund yield is steady just above 2.40%.

Trading action outside of equities is also mixed. Cryptocurrencies are having a big day with Bitcoin up 4.1% and Ethereum up 2.3% as traders chase volatility suggesting there may still be some appetite for risk out there.  A warm spell in some areas has Natural Gas down 3.6% this morning while US Crude Oil is down 0.25%. Metals are having a better day with Platinum up 2.1%, Copper up 0.2% and Gold up 0.4%.

It’s the first day of Canadian bank earnings week and results are mixed. Bank of Nova Scotia ($1.69 vs street $1.61) beat expectations due to growth in its Canadian and International banking operations, but increased its loan loss provision to $962M from $638M a year ago. Bank of Montreal’s earnings per share ($2.56 vs street $3.02) disappointed investors due to a combination of soft Capital Markets results, a one-time special assessment from the FDIC in the US and other factors.    

US earnings have been beating expectations, led by Zoom Video ($1.42 vs street $1.15) and home improvement retailer Lowes ($1.77 vs street $1.68).

US Durable Goods Orders (-6.1% vs street -4.5% and previous 0.0%) were even worse than feared. Later this morning, US house prices and Consumer Confidence are on the way. Tomorrow morning brings a Reserve Bank of New Zealand interest rate decision, a US GDP update and US Core PCE inflation. Over today and tomorrow there also are four Federal Reserve Board and two Bank of England officials out speaking.    

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