Morning Minutes

Fed Decision Day and Canada Earnings Start Soft




US equity markets finished Tuesday with gains of up to 0.6% yesterday including a 12th straight win for the Dow Jones Industrial Average. Today, however, investors appear to be pausing to wait and see what the Fed does/signals about interest rates this afternoon, and to digest earnings reports.

Markets have been backsliding this morning as the bulls take a break. US index futures are down 0.1% to 0.3%, while over in Europe, the CAC is down 1.8%, the Dax is down 0.8% and the FTSE is down 0.6%. Commodities are backsliding today with WTI Crude Oil down 1.2%, Natural Gas down 1.6%, and Copper down 0.9%.Gold is the one notable market in the green this morning, climbing 0.5%.

Back in June, FOMC members forecast two more 0.25% interest rate hikes for this year, one of which is widely expected to come this afternoon when the Fed releases its latest interest rate decision at 2:00 pm EDT today. Unless there is a surprise (more likely no move than a bigger increase) investors may focus more on the statement for hints on how many more rate hikes may be on the way and when. A pattern of alternate meeting increases (May and July) would suggest the next hike could come at the late Oct 31 / Nov 1 meeting. As such investors may look for commentary supporting this pattern, a one and done hike, the possibility of more rate hikes, or other options.

Investors are also digesting another round of earnings from big cap and industry leading stocks from overnight and this morning. Notable numbers include: Microsoft* ($2.69 vs street $2.55, down 3.3% premarket), Alphabet ($1.44 vs street $1.34, up 6.0% premarket), Visa ($2.16 vs street $2.11), Texas Instruments ($1.87 vs street $1.76), and Coca-Cola ($0.78 vs street $0.72).

Railroads Canadian National ($1.76 vs street $1.79 and Union Pacific ($2.57 vs street $2.74, CEO leaving, up 7.6% premarket) posted disappointing numbers. Canadian earnings season is now underway with soft results out overnight from First Quantum ($0.16 vs street $0.24), and Rogers Communications ($1.02 vs street $1.11). Later today Meta Platforms headlines in the US while Agnico-Eagle and West Fraser Timber headline in Canada.

*Shares of Microsoft 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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