Morning Minutes

A Big Week For Business News Begins With a Bounce

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The start to the new trading week finds US stock markets on the rebound. The three main US index futures contracts are up 0.4%-0.5%, clawing back some or all of Friday’s index losses of 0.4% to 1.8%. European indices are also rebounding today with the Dax and FTSE both up about 0.3%.

Commodities are also climbing this morning. WTI crude oil is up 1.5%, but still well short of $100.00/bbl, while copper is up 0.6%. In currency action, gold is having a tough day, slipping 0.2% against the US Dollar on a day where the greenback is weak, losing 0.3% to the Euro, 0.4% to the Canadian Dollar, and 0.6% to the Pound. This weakness does not appear to be related to renewed investor confidence, however, as cryptocurrencies are under pressure again with Bitcoin down 3.7% and Ethereum down 5.0%.

Recent weakness in the gold price may be starting to impact on the earnings of gold miners. Newmont Mining is down 3.4% in premarket trading today after reporting disappointing results ($0.46 vs street $0.60). This week we move into the heart of earnings season with several senior US companies reporting results, particularly in the technology sector. This week’s headliners include Microsoft, Alphabet, Visa, GM and McDonalds on Tuesday; Ford, Meta Platforms and Boeing on Wednesday; Apple, Amazon.com, Intel, Merck, Mastercard and Warner Bros on Thursday, wrapping with ExxonMobil and Chevron on Friday. Earnings season ramps up in Canada this week too with the two railroads, several gold miners, forest products producers and a number of senior oil companies on the docket.

The main event of the week ahead appears likely to be Wednesday afternoon’s Fed decision. The street is currently expecting another 0.75% rate hike, but investors may focus more on comments related to inflation fighting and the state of the economy in trying to determine, how much higher rates may need to go to beat inflation, how long the Fed may remain hawkish and whether the Fed appears willing to allow a recession to take hold in order to meet its objectives.

Investors may find out whether the US is in a technical recession (two consecutive quarters of negative GDP growth) on Thursday when the first crack at US Q2 GDP comes out. This week also brings Canadian GDP, more US housing numbers and preliminary PMI reports as we move toward the last business day of the month on Friday.

SIA Wealth In The Media:

Chief Market Strategist Colin Cieszynski appeared on BNN Bloomberg today where he discussed tactical investing strategies, recent earnings related market action and relative strength in currency markets.

SIA Wealth portfolios recently moved to 100% cash: Chief market strategist

The implications of a strong U.S. dollar for different companies

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

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