Morning Minutes

China Monetary Support, Positive Earnings, and Canada Jobs In Focus



Stock markets in Europe and North America continue to bounce back from recent weakness this morning. The Dax and FTSE are up 1.0% and 0.9% respectively, while US index futures are up with gains varying between 0.1% for NASDAQ futures and 0.7% for Dow futures. In the UK today the NIESR agency posted a GDP estimate for the three months that ended in June well above expectations (4.8% vs street 2.6%).

Overnight, China stepped in with its first new monetary stimulus in over a year, cutting bank reserve requirements by 0.5%, freeing up approximately 1 trillion Yuan in bank capital for new lending to individuals and businesses. Commodities have responded positively to this news, particularly China-sensitive Copper, which is up 1.7%, while WTI crude oil is up 1.1%.

Clothier Levi Strauss reported strong results for its May quarter overnight with sales soaring ($1.28B vs street $1.21B and year-ago $0.49B) and earnings crushing expectations ($0.23 vs street $0.09). In what could be an early indicator of whether investors are prepared to pay for good news in the upcoming earnings season, Levi’s shares are up 3.3% in premarket trading.

Canada employment bounced back strongly in June as provinces reopened their economies to varying degrees A 230K increase in jobs in June offset nearly all of the lockdown declines in May (-68K) and April (-207K). The unemployment rate improved to 7.8% from 8.2% last month.  

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Colin Cieszynski, Chief Market Strategist

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

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