Morning Minutes

Inflation and Regulatory Headwinds Weigh on Stocks While Commodities Rebound

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US index futures had been in the green for most of this morning but have turned downward in the last few minutes indicating disappointment among investors with today’s US CPI report. US consumer price inflation pressure eased slightly in April, but not as much as investors had hoped (8.3% vs street 8.1% and previous 8.5%). Chinese consumer (2.1% vs street 1.8%) and producer (8.0% vs street 7.7%) announced overnight were both higher than expected. The US 10-year treasury note had slipped back under 3.00% this morning but has regained it following the inflation numbers.  

US index futures, which had been up 0.8% to1.3% just before the inflation numbers came out, are now down 0.4% to 1.0%. Yesterday US markets were mixed with the NASDAQ gaining 1.0% but the Dow losing 0.25%. European indices are trading higher today with the Dax up 1.3% and the FTSE up 0.7%.  

Commodity prices are on the rise again today with WTI crude oil rallying 4.0%, natural gas rising 2.6% and copper climbing 1.6%. Alternative currencies are also moving up today with gold and bitcoin both up 0.4%. Paper currencies, however, remain under pressure with the Euro, Yen, Pound and Loonie all down 0.4% against the US Dollar and the Australian Dollar falling 1.0%.   

In corporate news this morning, Canada’s Commissioner of Competition has advised against the proposed merger of cable/wireless providers Rogers and Shaw, indicating that their plan to sell Freedom Mobile as not enough to offset the potential reduction in competition. Cryptocurrency exchange Coinbase is down 14.1% premarket, adding to yesterday’s 12.6% drop after it reported a surprise loss (-$1.98 vs street $0.18).

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Colin Cieszynski, Chief Market Strategist

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

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