Morning Minutes

Manufacturing In Focus With PMI Reports and Earnings Rolling Out




The last day of January finds world markets sluggish which could be a combination of month-end positioning and investors sitting on their hands awaiting tomorrow’s Fed decision. US index futures have clawed back some of their overnight losses, but they remain in the red this morning with declines of 0.1%-0.3%. Major overseas markets are also down across the board with the Dax down 0.5%, the FTSE falling 0.6% and the Hang Seng sliding 1.0%. Energy and metals are also struggling today with Copper down 1.4%, WTI Crude Oil down 0.9%, and gold, along with natural gas, down 0.7%.

News out of the manufacturing sector has been positive overnight. China announced a big surge back into expansion territory for its Manufacturing PMI (50.1 vs previous 47.0) and Non-Manufacturing PMI (54.4 vs previous 41.6) numbers as its economy continues to reopen and rebound from COVID lockdowns.

Earnings reports have also been positive for the most part, headlined by strong results from General Motors ($2.12 vs street $1.69), Whirlpool ($3.89 vs street $3.34), International Paper ($0.87 vs street $0.69), McDonalds ($2.59 vs street $2.45), PulteGroup ($3.63 vs street $2.93), and UPS ($3.62 vs street $3.58). Caterpillar, however, released disappointing earnings ($3.86 vs street $4.02). After the close today, results are due from AMD, Snap, Electronic Arts, Amgen, and others.  

In other economic news, the International Monetary Fund increased its 2023 global GDP growth forecast to 2.9% from 2.7%.  Canada reports GDP growth of 0.1% over the previous month for November, slightly better than the 0.0% street estimate. US Chicago PMI is due at 9:45 am today (street 41.0 vs previous 44.9). Tomorrow morning brings more Manufacturing PMI reports from around the world plus US ADP private sector payrolls.

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Colin Cieszynski, Chief Market Strategist

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

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