Morning Minutes

Debt Ceiling Resolution and Nonfarm Payrolls in Focus




Building on yesterday’s US index gains of 0.50%-1.25%, US index futures are up another 0.4%-0.6% this morning. Last night the US Senate passed the debt ceiling deal, ending that crisis and averting a US government debt default. Overseas markets are also rallying on the news with the Hang Seng soaring 4.0%, while the Dax and FTSE are both up about 1.0%.

Focus now turns back to the economy and the future of US monetary policy. Several Fed speakers have suggested this week the FOMC may pause its interest rate hiking program at this month’s meeting. Today’s US Nonfarm Payrolls report (339K vs street 190K vs previous 253K) was significantly better than expected. Meanwhile, wage inflation, in the form of Average Hourly Earnings (4.3% vs street 4.4%), shows inflation pressures continuing to ease. Yesterday’s US economic news was mixed with ADP payrolls and Construction Spending beating expectations but ISM Manufacturing PMI disappointing.

In earnings news, athletic clothing producer and retailer lululemon athletica ($2.28 vs street $1.96, up 14.2% premarket), Dell Technologies ($1.31 vs street $0.86), and Broadcom* ($10.32 vs street $10.12) all beat investor expectations.

Commodities are also bouncing back today. WTI Crude Oil is up 1.9% ahead of Sunday’s OPEC meeting, while Copper is up 1.7%.

*Shares of Broadcom are held in portfolios managed by SIA Wealth Management.

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Colin Cieszynski, Chief Market Strategist

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

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