Morning Minutes

Earnings In Focus Ahead of Tomorrow’s Job Reports



It’s a quiet summer morning for world markets with US index futures, the DAX and FTSE in Europe, plus crude oil, copper, gold and the US 10-year treasury yield all trading essentially flat.

Moving away from the mainstream, there has been some action in specific markets that suggests investor appetite for risk continues to fade as growth expectations ratchet down. For example, cryptocurrencies are under pressure today with Bitcoin falling 4.4% and Ethereum dropping 2.6%.

A number of US companies are under pressure this morning following earnings reports, despite headline numbers beating expectations. Uber, for example, is down 4.3% premarket after management indicated that its better than expected earnings ($0.58 vs street $0.51) was powered more by investments than ride sharing services. Etsy, meanwhile, is down 12.4% premarket despite strong earnings ($0.68 vs street $0.63) as user growth slowed to 24% over quarter from 100% over quarter growth previously. Other companies beating the street on earnings overnight include Wayfair ($1.89 vs street $1.15), Electronic Arts ($0.79 vs street $0.67), and Booking ($2.55 vs street $2.04). Interestingly, COVID vaccine producer Moderna is down 2.7% premarket, while COVID treatment producer Regeneron is up 2.4% premarket after both companies reported earnings overnight.

Canada has posted a positive surprise trade surplus of $3.23B for June, a deficit of -$0.68B had been widely expected. Several Canadian companies are scheduled to report results today including BCE, Canadian Natural Resources, Gildan, Open Text, Domtar, GoEasy* and Constellation Software.

Employment numbers continue to dominate the economic calendar in the back half of this week. Bouncing back from yesterday’s ADP payrolls disappointment, US weekly initial jobless claims showed some improvement (385K vs previous 399K), while continuing claims fell below 3 million (2.93M vs street 3.26). and beat expectations. Tomorrow morning brings the monthly US Nonfarm payrolls (street 870K vs previous 850K) and Canadian employment (street 177K vs previous 230K) reports.

*Shares of GoEasy are included 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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