Morning Minutes

Inflation and Earnings Influence Morning Trading

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Yesterday’s rebound in US equity markets has continued overnight and into this morning with the Hang Seng gaining 2.9% and the Dax climbing 0.8% in overseas action. US index futures are up 0.3%-0.9% so far today. Recent market headwinds related to fears over high inflation and interest rate hikes continue to ease for the moment. This morning, it was reported that US Core PCE inflation, the Fed’s favorite measure, dropped back in April as expected (4.9% in line vs previous 5.2%).

Earnings reports, meanwhile, continue to have a significant impact on trading in individual stocks and sectors. Canadian bank earnings week wrapped up strong with National Bank beating the street and raising its dividend ($2.55 vs street $2.25, 6% dividend increase. On the other hand, Canopy Growth posted a worse than expected loss (-$1.46 vs street -$0.30, down 12.6% premarket)

US earnings, however, have also been mixed. Some retailers, such as Gap (-$0.44, same store sales -14.0% vs street -$12.2%, 2022 EPS guidance $0.30-$0.60 vs street $1.85-$2.05, down 19.0% premarket), and American Eagle ($0.16 vs street $0.24, down 10.5% premarket) are getting hammered this morning after disappointing on earnings and/or guidance. Computer maker Dell, on the other hand, beat expectations ($1.84 vs street $1.39, up 11.4%).

SIA Wealth In The Media

Chief Market Strategist Colin Cieszynski appeared on BNN Bloomberg today where he discussed the recent rebound in equity markets and the winners and losers from the recently completed earnings season.

The recent bounce is encouraging, but the bear market isn’t over yet: Chief market strategist

Defensive stocks outperformed while big retail and homebuilders crushed: Chief market strategist

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Colin Cieszynski, Chief Market Strategist

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

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