Morning Minutes

Canada Employment and Levi’s Earnings In Focus




Stock markets around the world remain stuck in neutral this morning, unable to build on yesterday’s US gains of 0.2% to 1.0% and another record close for the S&P 500. US index futures are hovering around flat between a 0.2% drop for NASDAQ futures and a 0.2% gain for Dow futures. Overseas markets are split as well with the Nikkei up 0.2%, the Dax flat, the FTSE down 0.2% and the Hang Seng down 1.0%.

For the second month in a row, Canada posted surprisingly spectacular job growth (303K vs street 100K and previous 260K), while its unemployment rate also beat expectations (7.5% vs street 8.0% and previous 8.2%). This provides more evidence of a strengthening employment market in North America and more support for the Bank of Canada to consider starting to scale back asset purchases at upcoming meetings.

Clothier Levi Strauss is up 4.4% in premarket trading today after announcing better than expected results for its February quarter. Levi beat expectations on EPS ($0.34 vs street $0.25) and sales ($1.31B vs street $1.25B) as a 41% increase in online sales offset reduced sales through physical stores. Management raised sales and EPS forecasts for the current fiscal year after indicating improving business trends.

Producer prices for China (4.4% vs street 3.5% and previous 1.7%) suggest that inflation pressures are starting to creep upward, but investors don’t appear to be overly concerned about it at the moment. The US 10-year treasury note yield continues to consolidate recent gains near 1.70%, and gold, which is seen by some investors as a hedge against inflation, is down 1.1%. Commodity prices are falling back again this morning with copper down 0.6%, WTI crude oil down 0.4%, and silver down 1.8%. The US producer price report (street 3.8% vs previous 2.8%) has been delayed past the time of writing today.

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Colin Cieszynski, Chief Market Strategist

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

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