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Indices Rebound as Investors Digest Technology and Retailer Earnings

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Trying to bounce back from yesterday’s 0.2% to 0.6% declines for US indices, US index futures are up 0.1% to 0.5% this morning. Asia Pacific markets fell overnight, particularly the Hang Seng with a 1.3% drop, while European indices are flat to down slightly. Commodity action is mixed with Natural Gas up 1.9%, oil flat, and copper down 0.6%. Gold is down 0.25% while Bitcoin is down 2.4% and trading back under $60,000.

Two of the largest US technology companies reported results overnight. Nvidia* has jumped 8.5% in premarket trading after the graphics chip maker beat street estimates for EPS ($1.17 vs street $1.11) and sales ($7.1B vs street $6.8B). Results were boosted by demand from cloud computing companies for use in their data centers, and from video gaming on the consumer side. Network equipment producer Cisco Systems, on the other hand, is down 6.5% premarket. Despite beating expectations on EPS ($0.82 vs street $0.80), sales ($12.9B vs street $13.0B), and sales growth guidance for next quarter (4.5%-6.5% vs street 7.4%) fell short of expectations.   

Retailer earnings continue to roll in above expectations, headlined today by Macy’s, which has jumped 11.2% in premarket trading after the department store chain crushed earnings expectations ($1.23 vs street $0.31) on strong same store sales growth (35.6% vs street 29.3%) and boosted its EPS forecast for this year ($4.57-$4.76 vs previous $3.14-$3.75). Other US retailers beating expectations today include Kohls ($1.65 vs street $0.64, up 9.6% premarket), Victoria’s Secret ($0.81 vs street $0.71, up 11.5% premarket), and Bath & Body Works ($0.92 vs street $0.60, up 4.8% premarket).

In Canada this week, the focus has been on grocers who in their reports and management commentary, highlighted some interesting themes, including: food costs and related inflation pressures continue to rise, after going to restaurants in summer, consumers seem to be cooking more at home again into the fall (which impacts sales volumes for grocers), and that the additional costs of doing business under COVID appear to be in decline.

* Shares of Nvidia are held in portfolios managed by SIA Wealth Management    

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Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

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At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

Colin Cieszynski, Chief Market Strategist
Market Commentary:

Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

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