Markets Digest ADP Payrolls, Earnings Reports and Canada Budget

The AI- and Technology-led retreat in global stocks continued overnight but appears to be moderating this morning.  Following a 2.0% decline for the NASDAQ, the Nikkei fell 2.5%, and the DAX slipped 0.5%. There are early signs of stabilization, with the Hang Seng, FTSE, NASDAQ Futures, and Dow Futures all trading steady. Better-than-expected US ADP payrolls (42K vs Street 25K) appears to be helping to shore up confidence.

There has been a mixed reaction to earnings reports overnight. Advanced Micro Devices* is down 1.8% premarket despite beating the Street on earnings, while Lumentum Holdings* is up 16.8% premarket on an earnings beat. McDonalds is up 1.0% premarket after missing on earnings ($3.22 vs Street $3.33) but reporting same-store sales growth of 3.6%.

Precious metals appear to be regaining their footing this morning. Gold is up 0.6% and Silver is up 0.9%, to trade near $4,000/oz and $47.50/oz respectively. Commodities trading is mixed with Crude Oil down 0.4% and Copper up 0.2%. Bitcoin has bounced up off of $100,000 and is currently up 2.2%.

Most currencies have stabilized this morning apart from the Loonie which is down another 0.2%. Yesterday, Canada’s Federal Government released its latest budget. The government forecast a $78.3B deficit, up from the $42.2B projected in its December 2024 update. For stocks, Construction and Defense related companies may be seen as potential beneficiaries of significant planned spending increases on infrastructure, defense, and housing. Bank of Canada Governor Macklem speaks this afternoon with investors likely looking for more commentary on the economy and monetary policy.    

*Shares of Advanced Micro Devices and Lumentum are held in some portfolios managed by SIA Wealth Management.

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