Overseas markets have continued yesterday’s downward momentum with the Hang Seng falling 2.3% overnight while in Europe, the Dax and FTSE are down 0.7% and 0.4% respectively. US index futures, however, are marginally positive, offsetting yesterday’s small declines for US indices, suggesting that stocks may be starting to regain some footing.
The headwind from rising interest rates remains in place, however, with the US 10-year treasury note yield climbing toward 2.90%. Today, the impact of economic uncertainty and tighter monetary conditions appears to be having a larger impact on commodities than stocks. WTI crude oil is down 2.3% trading near $105.00/bbl, while natural gas has plunged 6.0%, and copper is down 1.4%.
While stocks appear tentative and commodity action has been negative, currency trading suggests investor confidence may be improving. Defensive havens like the Japanese Yen, down 1.0% and gold, down 0.25% have been sliding while cryptocurrencies are up, led by a 2.2% gain for Ethereum and a 1.1% gain for Bitcoin, suggesting that fear among investors may be starting to ease.
Earnings season picks up today with generally positive results, headlined by Halliburton ($0.35 vs street $0.34), Johnson & Johnson ($2.67 vs street $2.56), and Travelers ($4.22 vs street $3.57). After the close today, earnings are due from Netflix, and IBM, among others.
Housing market data has been mixed this morning. Canadian housing starts missed expectations slightly (246K vs street 250K) but US housing starts beat expectations slightly (1.87M vs street 1.82M).