Morning Minutes

Market Selloff Resumes as Investors Await a Big Earnings Week




The broad-based selloff across world markets which started late last week, resumed again overnight. US treasury yields remaining below 3.00% for not and the re-election of French President Macron do not appear to have provided much in the way of support. On the other hand, the potential impact of continuing COVID lockdowns in China on resource demand appear to still be dragging on commodities.

This morning finds US index futures down 0.6%-0.8% adding to Friday’s losses of 2.6%-2.8%. Shanghai and Hong Kong plunged 5.1% and 3.8% respectively overnight. In Europe today, the Dax is down 1.2%, while the FTSE is down 1.8%. Energy markets are very mixed with WTI crude oil down 4.5% but natural gas up 2.1%. Metals are getting hammered with Copper, Platinum and silver down 2.2% to 2.8%. The US Dollar is having a big day, gaining 0.4% against the Euro and the Loonie, 0.7% against the Pound, 1.5% against gold and 1.9% against Bitcoin.

In corporate news today, Twitter is up 4.7% in premarket trading on press reports that Elon Musk’s takeover plans may be getting traction. Coca-Cola reported better than expected earnings ($0.64 vs street $0.58). A flood of earnings are expected to come out this week from the US and Canada across a number of sectors including Big Tech, Big Oil, Big Pharma, Big Rail, Big Mining and more. Headliners include: Microsoft, Alphabet, Canadian Pacific and Air Canada on Tuesday, Facebook, Ford, Canadian Pacific and gold miners on Wednesday, Apple, Amazon Caterpillar and Twitter on Thursday, and Exxon Mobil, Chevron and Imperial Oil on Friday.

The last week of the month brings a number of economic reports. Bank of Canada Governor Macklem speaks today. US durable goods orders come out tomorrow. GDP numbers for the US and Canada come out Thursday and Friday.

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Colin Cieszynski, Chief Market Strategist

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

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