Morning Minutes

Energy, Earnings and Employment Influence Trading and Sentiment




Thursday morning finds energy prices moving up once again, boosted by several factors. WTI crude oil is up 0.75% and putting $55.00 further into the rear-view mirror as OPEC+ agreed to extend current supply cuts and US weekly oil inventories (both API and DOE) continued to decline. Natural gas, meanwhile, has started to rebound from a trading correction, rising 0.6% in early trading. Natural gas may remain active through the day today, particularly around the weekly EIA natural gas storage report (street -192 BCF vs previous -128 BCF), which may start indicate just how much of an impact cold temperatures have had on demand and storage, while the impact of this week’s big winter storm may turn up more in next week’s report.   

US index futures are steady to up slightly this morning with gains of 0.1% to 0.5%, coming off of a flat Wednesday. Meanwhile, individual stocks continue to stage significant moves in response to earnings reports and other corporate developments.

Highlights of this morning’s round of results include: Canada Goose (up 17.6% premarket, sales $474M vs street $415M boosted by 39% online sales growth and Chinese growth). Suncor Energy’s results were distorted by writedowns but revenues came in below expectations (sales $6.6B vs street $7.5B and year-ago $9.6B)

US highlights from today include: Paypal* (up 6.4% premarket, EPS $1.08 vs street $1.00), and Costco (January same store sales up 15.9% above street 11.7%). On the other hand, Qualcomm* is down 7.1% premarket after EPS beat the street ($2.17 vs street $2.10). Although management guided for Q1 sales above expectations, it suggested that growth this year could be hampered a bit by chip supply constraints.  Merck also missed expectations ($1.32 vs street $1.38).

Later today, earnings reports are due from Lightspeed POS*, Open Text, Snap, and others.  

Building on yesterday’s positive ADP payrolls report, weekly unemployment claims also beat expectations for both initial claims (779K vs street 830K) and continuing claims (4.59M vs street 4.70M). This sets the stage for tomorrow’s US nonfarm payrolls report (street +50K vs previous -140K) and Canadian employment report (street -47K vs previous -62K). While waiting for the job numbers, investors may look at the US factory orders report due at 10:00 am EST today (street 0.7% vs previous 1.0%).

*Shares of Lightspeed POS, Paypal and Qualcomm 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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