Morning Minutes

Earnings, Manufacturing PMI and RBA Surprise Pause In Focus




The first day of August finds world markets giving back some of Monday’s gains in what appears to be a normal trading correction following a month-end push by the bulls. US index futures down 0.1% to 0.5%, while in Europe, the Dax is down 1.0%, and the FTSE is down 0.2%.

The US Dollar is bouncing back today, putting pressure on other currencies and commodities. Gold is down 0.8% and has slipped back under $2,000/oz. The biggest currency drop is in the Australian Dollar, which has fallen 1.4% after the Reserve Bank of Australia did not proceed with a widely expected 0.25% interest rate hike, electing to pause again instead. The US Dollar is also up 0.4%00.6% today against the Euro, Pound, and Loonie. Commodities are also backsliding today, with Copper down 0.8%, and WTI Crude Oil down 0.3%.

Manufacturing PMI reports from around the world have been rolling out overnight. Although the majority of numbers have remained below 50 in contraction territory, Japan, the UK, France, and Italy all beat street expectations. China’s private Caixin report was the most disappointing, rolling back under 50. Meanwhile, employment numbers for Germany and Italy were better than expected, and the UK shop price inflation number showed improvement.

It’s a busy morning for North American economic reports as well. Canadian manufacturing PMI (street 48.9) is due at 9:30 am EDT, followed by US ISM Manufacturing PMI (street 48.0) at 10:00 am EDT. Also at that time US Construction Spending (street 0.6% vs previous 0.9%) is due, followed by Auto Sales through the day.

Earnings season continues this morning with a series of positive results from the US headlined by a surprise profit from Uber* (+$0.18 vs street -$0.01). Other headliners this morning include Big Pharma names Merck (-$2.06 vs street -$2.18), and Pfizer ($0.67 vs street $0.75). After the close today, results are due from AMD and Starbucks, followed by Thomson Reuters* tomorrow morning.   

*Shares of Uber and Thomson Reuters are held in some 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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