Morning Minutes

A Positive Start To A Big Week For Market News




Continuing a rebound which started late last week, equity markets around the world are off to a positive start this week. US index futures plus the FTSE and the Dax are all up 0.3%-0.4%. Asia Pacific markets were even stronger with the Nikkei gaining 1.8% and the Hang Seng climbing 1.0%.

The US Dollar continues to give back some of its recent gains, which has sparked a number of significant rebounds across currency and commodity markets. For example, WTI and Brent crude oil are both up 3.1% today, natural gas is up 1.4%, copper is up 1.9%, and the oil-sensitive Canadian Dollar is up 0.8%. Cryptocurrencies are also on the rebound with Bitcoin climbing 3.7% and regaining $50,000, while Ethereum is up 5.5%. Gold is lagging a bit with a 0.5% gain and remaining stuck below $1,800/oz.

Although the last two weeks before Labor Day are a time when many people are on vacation, it’s turning out to be a busy time for business news. Today, flash PMI reports for August, the first look at how selected economies are doing so far this month, are out today. Overall, results for Japan and Europe are still in moderate expansion territory in the low 50s for Japan and 55-62 for European countries, but the numbers have been slightly worse than street expectations overall, suggesting that the Covid Delta wave may be having a small impact on business conditions. US flash Manufacturing PMI (street 62.8 vs previous 63.4) and flash Service PMI (street 59.4 vs previous 59.9) numbers are due at 9:45 am EDT today.

On the corporate side, investors in the US are looking to the FDA, who is widely expected to give full commercial approval to the Pfizer-BioNTech COVID vaccine this week. Ride sharing companies like Uber and Lyft and related delivery stocks like DoorDash are under pressure in premarket action as battles over whether their drivers count as employees or independent service providers continue to rage in US courts.

In Canada, investors are awaiting bank earnings week which starts tomorrow with results from the Bank of Montreal and the Bank of Nova Scotia. The May to July period was a volatile and uneven one for the Canadian economy between lockdowns and staggered reopenings so results could be distorted. Investors may continue to look to loan loss provisions as an indicator of the health of the banks’ businesses.

Starting on Thursday, the Fed is holding its annual Jackson Hole Symposium, a forum where Fed chairs have historically signaled changes to monetary policy direction. This year, investors may look to comments from current chair Powell, for indications of whether the US central bank is planning to start reducing asset purchases later this year or if it plans to keep the stimulus pedal to the metal into 2022.

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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