Morning Minutes

Indices Digest Stronger than Expected Earnings; Bank of Canada Preview




US index futures are trading flat this morning as investors digest this week’s flurry of earnings reports and recent new all-time highs for the Dow and the S&P 500. There continues to be significant premarket action in individual stocks and sectors with several stocks in response to another wave of positive earnings news. Commodities are under pressure again today with WTI crude oil and natural gas both down 1.2%, and copper down 1.4%.

Highlights of US results released overnight and this morning include: General Motors ($1.52 vs street $0.96 despite the chip shortage), McDonalds ($2.76 vs street $2.46, same store sales up 12.7% as economies reopen, up 2.7% premarket), Alphabet/Google ($27.99 vs street $23.48), Twitter ($0.18 vs street $0.03), Microsoft ($2.27 vs street $2.07), Coca-Cola ($0.65 vs street $0.58, restaurant sales rebound, up 2.8% premarket), Visa ($1.62 vs street $1.54) and Kraft Heinz ($0.65 vs street $0.58, raised guidance). Robinhood (down 9.5% premarket, -$2.06 vs street -$1.37 as cryptocurrency trading dropped off), and Boeing (-$0.60 vs street -$0.20) reported worse than expected losses.

The Bank of Canada is meeting this morning on monetary policy with the decision and statement due at 10:00 am EDT. With the federal election now over, the path is clear for the central bank to resume tapering back its asset purchase program. Previously, BOC officials and statements have hinted that asset purchases could end by the end of this year and interest rate hikes could start in the second half of 2022, so investors may look to today’s statement and press conference for any signs of whether this loose timetable has changed. Any comments related to inflation pressures and the state of the economy may also attract attention. Investors may also look to tonight’s Bank of Japan meeting and tomorrow’s European Central Bank meeting for comments on inflation pressures and where they stand on tapering back stimulus heading into next week’s big Fed meeting.

US durable goods orders fell less than expected in September (-0.4% vs street -1.1%). US DOE weekly oil inventories are due at 10:30 am EDT (street 1.9 mmbbl build).

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Colin Cieszynski, Chief Market Strategist

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

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