Morning Minutes

Markets Bounce Back As Canada Jobs Rebound and US Nonfarm Payrolls Miss




Concerns that a potentially overheating economy could force central banks to tighten monetary policy more aggressively that were sparked by stronger than expected US ADP Payrolls, Service PMI and Auto Sales on Thursday, have eased off a bit this morning after US nonfarm payrolls came in below expectations (209K vs street 225K and previous 306K).

US index futures are trading flat to up 0.15% since the payroll news came out, stabilizing after major US indexes fell 0.8%-1.0% on Thursday. Over in Europe, the Dax is up 0.4% while the FTSE is down 0.4%. The US Dollar has dropped back slightly, enabling Gold, Copper, the Euro, Pound and Canadian Dollar to all post gains of about 0.3% this morning, while WTI Crude Oil is flat.

Canadian job growth exceeded expectations (59K vs street 20K and previous -17K), while wage growth slowed significantly (3.9% vs street 5.1%), suggesting pressure from some of the stickier parts of inflation may finally be easing. At this point, the Bank of Canada is still widely expected to raise its benchmark rate by 0.25% when it meets next week.

We are still a week away from the start of earnings season and confession season remains quiet for the most part. Clothier Levi Strauss, however, is down 8.2% in premarket trading despite beating the street by a penny after management cut EPS guidance for this year to $1.10-$1.20 from $1.30-$1.40.

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Colin Cieszynski, Chief Market Strategist

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

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