Morning Minutes

Indices Retreat Amid Mixed Employment and High Inflation Reports

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US index futures have taken a sharp turn downward following the release of a brutal US employment report that suggested the economy could be in the grip of stagflation, a time of high inflation and low economic growth. Dow futures are now down 0.2% while NASDAQ futures are down 0.7%, adding to yesterday’s losses.

In contrast to Wednesday’s ADP payrolls report which doubled expectations, US Nonfarm payrolls came in at slightly less than half of what was expected (199K vs street 400K), while average hourly earnings (4.7% vs street 4.2% and previous 5.1%) indicated that wage inflation remains high.

The Canadian employment report was more positive with job growth exceeding expectations (55K vs street 28K) and average hourly wages easing a bit (2.7% vs previous 3.0%). The Canadian market may also respond to another day of gains for energy prices with WTI crude oil up 0.9% and natural gas up 2.4%.   

European markets are mixed. The Dax is down 0.6% and the CAC is down 0.5% after Eurozone consumer price inflation increased more than expected (5.0% vs street 4.7%) and despite stronger than expected Eurozone retail sales (7.8% vs street 5.6%). The FTSE is holding steady today.

Metals are also steady today but cryptocurrencies are getting slammed again with Bitcoin dropping another 3.9% and Ethereum plunging another 7.6%. On the flip side of that, Gamestop is up 18.2% in premarket trading after announcing plans to get more into cryptocurrency and related marketplaces.

Colin Cieszynski, Chief Market Strategist

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

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