Commodities Soar While Equity Investors Assess Earnings Reports

Today marks the peak of earnings season, with four of the Magnificent 7 companies reporting results and issuing forecasts. Tesla* ($0.50 vs Street $0.45) and Meta Platforms ($8.88 vs Street $8.21) are up 1.9% and 8.9% premarket, with traders responding positively to the results. Microsoft, however, is down 6.9% amid signs that its cloud computing growth may be slowing. Apple reports after the close today.

In other earnings news, appliance producer Whirlpool is down 10.4% premarket after disappointing on earnings ($1.10 vs Street $1.52). Celestica is down 3.3% premarket despite positive earnings ($1.87 vs Street $1.77). Caterpillar* is up 1.3% premarket on strong results ($5.16 vs Street $4.71).

With investors digesting this wave of earnings news, US index futures are modestly higher by 0.1% to 0.2% so far today. In European trading, the DAX is down 1.0%, with SAP falling 16.1% following its earnings release, while the FTSE is higher by 0.7%.

The US Dollar continues to retreat following yesterday’s US interest rate decision, where the FOMC held the Fed Funds rate steady at 3.75% as expected, but with two dovish dissenters voting in favour of a 0.25% rate cut. The Euro, Yen, Loonie, and Aussie are all higher by 0.1% to 0.3% this morning.

Meanwhile, capital flows from offense to defense continue in alternative currencies. Cryptocurrencies are under pressure, with Bitcoin down 1.3%, while precious metals are rallying again, with gains of 4.2% to 4.5% across Gold, Silver, and Platinum. Commodities are also surging, with Crude Oil up 2.4%, Natural Gas up 4.0%, and Copper higher by 7.2%.

*Shares of Tesla and Caterpillar are held in some portfolios managed by SIA Wealth Management.

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