Morning Minutes

Canadian Retail Sales Rebound, But US Earnings Disappoint




The recent trading rebound in global stock markets appears to be fading today. European indices have turned back downward with the Dax dropping 1.2% and the FTSE falling 0.5%. US index futures are down 0.5%-0.8%, giving back a sizeable chunk of yesterday’s US gains which were around 1.25% for the big 3 indices. With the war in Ukraine continuing today’s call between US President Biden and Chinese President Xi may attract attention from investors, particularly if anything more than platitudes actually comes out of it.

Tightening monetary policy also remains a big focus. In the US, St. Louis Fed President Bullard, who had hinted several weeks ago that the Fed may accelerate rate hikes, a change in plan that was confirmed by Wednesday’s FOMC member forecasts, defended his hawkish dissent. Bullard indicated that he is now looking for rates to rise toward 3.00%-3.25% this year while the main group of Fed members published forecast is 1.75%-2.0%. Conversely, the Bank of Japan remained dovish at its meeting overnight, leaving it as one of the few central banks to keep its negative interest rate and asset purchase stimulus programs intact.

Canada retail sales bounced back even more strongly than anticipated in February as COVID restrictions started to ease (3.2% vs street 2.4% and previous -1.8%). Canada new house price increases slowed (10.9% over year vs previous 11.8%)

Overnight earnings reports were disappointing amid indications that the recent Omicron wave had a negative impact on some companies’ costs and operations. Both FedEx ($4.59 vs street $4.65. down 3.2% premarket) and Gamestop (-$1.85 vs street +0.85, down 7.6% premarket) reported disappointing earnings despite better than expected sales and have been sliding in premarket trading today.

New Video: SIA Wealth March Webinar Replay

A replay of the SIA Wealth Market Outlook Webinar with Portfolio Managers Paul Vendrinsky and Kyle Wilson, plus Colin Cieszynski, Chief Market Strategist which discussed risk management in uncertain markets, recent changes to cash allocations in SIA Wealth managed portfolios, and answered questions from advisors and media is now available.

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Colin Cieszynski, Chief Market Strategist

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

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