Morning Minutes

Good News On Reopenings and Rollouts Boost Stocks




Bouncing back from yesterday’s declines of 0.4% to 1.7% for US indices, US index futures are up 0.5% to 0.6% this morning. This builds on positive overseas sessions overnight which saw the Hang Seng soar 2.7% and the Nikkei climb 0.5%, while in Europe, the Dax and the FTSE are both up about 0.8%.

Cryptocurrencies are soaring again today, led by Bitcoin which is up 10.3% and trading back above $52,000. Energy commodities are also on the rise with WTI crude oil and natural gas both up about 1.5%. Metals are struggling today with gold, silver and copper all down 0.5% to 0.8%.

Investors appear to be responding favorably to positive developments related to economic reopening in the US with Texas and Mississippi announcing plans to fully or almost fully reopen a week from today. Meanwhile, the US vaccine rollout continues to accelerate with the Biden Administration announcing yesterday that the US expects to have enough vaccines for all adults by the end of May, moved up from July. This news appears to have increased speculation that more states may be able to reopen in the months ahead.

News from ride sharing provider Lyft also suggests improving economic conditions. Its shares are up 5.1% in premarket action after the company announced that last week it saw its highest demand since last March and cut its forecast operating loss for its most recent quarter to -$135M from its previous guidance of -$145 to -$150M.

Today’s economic news has been disappointing so far.  US ADP payrolls for February grew less than expected (117K vs street 177K), which was partly offset to an upward revision to last month’s increase (to 195K from previous 174K). Service PMI reports out of Europe have been mixed this morning some beating and some missing expectations, but most readings arriving between 45.0 and 48.0 suggesting a mild contraction continues with much of the continent still under strict lockdowns.

The US ISM non-manufacturing report is due at 10:00 am EST today with the street expecting the headline number to hold steady at 58.9 and the new orders component to decline to 55.4 from 61.8. DOE oil inventories are due at 10:30 am EDT (street -0.92mmcf, note that API weekly inventories jumped by 7.3 mmbbls). The Fed’s beige book regional economic report is due at 2:00 pm today.

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Colin Cieszynski, Chief Market Strategist

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

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