Morning Minutes

Bank Earnings and US Retail Sales In Focus

cars

Share:

Facebook
Twitter
LinkedIn
Email
Print

Coming off of yesterday’s big bullish reversal where US indices shrugged off early losses driven by bad news on the inflation front to finish with gains of 2.2%-2.8%, trading in US index futures has been choppy overnight and into this morning while investors await this morning’s flood of earnings and economic news.

The UK has been particularly active today with the Pound plunging 1.2% and the FTSE soaring 0.8%. The Bank of England’s latest QE program is scheduled to end today and amid press speculation that the government may be about to walk back recent unpopular tax cut proposals, the country’s finance minister has been pushed out.

In economic news, US retail sales were mixed. The headline number came in below expectations (0.0% over month vs street 0.2%) but sales excluding autos were better than expected (+0.1% vs street -0.1%). In Canada, wholesale sales beat expectations (1.4% vs street 0.8%), but manufacturing sales were worse than feared (-2.0% vs street -1.8% ad previous -0.6%). China’s consumer price index increased in line with expectations (2.8% vs previous 2.5%), while inflation in France and Spain hovered around 6.0% and 9.0% respectively, keeping pressure on the ECB to keep tightening. At 10:00 am, the University of Michigan 5-year consumer inflation expectation report (previous 2.7%) may attract attention both from investors and the Fed.

The first big day of earnings season finds bank results generally down significantly from a year ago but mixed relative to expectations. JPMorgan Chase ($3.12 vs street $2.90) and UnitedHealth ($5.79 vs street $5.43) beat the street, but Morgan Stanley ($1.47 vs street $1.49) and Wells Fargo ($0.85 vs street $1.09) disappointed. General themes from the bank/brokerage results are mixed, including a pickup in interest income from traditional banking, increasing loan loss provisions, a plunge in investment banking revenue, an increase in trading revenues. Market reaction to these numbers has been muted with the biggest premarket move being a 3.4% decline for Morgan Stanley.

A big deal has been announced in the US grocery sector with Kroeger agreeing to purchase Albertsons for $24.6B. Surprisingly both stocks are down about 3.0% in premarket action suggesting that investors have concerns about the deal, perhaps in terms of timing, potential antitrust issues/competition reviews, or something else.

The US Dollar has been strong again today, gaining 1.0% against Gold, 0.5% against the Euro and 0.4% against the Canadian Dollar. Commodities are struggling against economic headwinds with WTI crude oil down 1.8%, natural gas down 1.3% and copper holding steady.

Subscribe to the Morning Minutes:

Today's earnings reports and market activity, delivered right to your inbox.

Colin Cieszynski, Chief Market Strategist

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

Read More

Legal and Regulatory Disclosures

Terms and Conditions:
This information is for Investment Advisors only. The website is for informational purposes only and is not intended to provide a complete description of SIA Wealth Management’s products or services. Past performance is not indicative of future results. It should not be construed as investment advice or relied upon in making an investment decision. Products and services of SIA Wealth Management are only offered in jurisdictions where they may be lawfully offered for sale. The information contained in this Website does not constitute an offer or solicitation by anyone to buy or sell any investment fund or other product, service or information to anyone in any jurisdiction in which an offer or solicitation is not authorized or cannot be legally made or to any person to whom it is unlawful to make an offer of solicitation. All products and services are subject to the terms of each and every applicable agreement. It is important to note that not all products, services and information are available in all jurisdictions outside Canada.

SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, Advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIA Wealth Management Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

INTERNET EXPLORER NOTICE