Morning Minutes

Markets Rebound Into Quarter-End with Inflation in Focus




The last trading day of the week, month and quarter finds stock markets around the world on the rebound to close out what has been a seasonally typically rough September. US Index futures are up 0.4% to 0.7%, building on yesterday’s US Index gains of 0.3%-0.9%. European trading action finds London, Paris, Frankfurt and Milan all up 0.7%-1.1%. In commodity action US Crude Oil and Copper are up 1.3%-1.4%. The US 10-year treasury yield is sitting just below 4.60%, down only marginally.

While much of this late quarter market bounce may be attributed to some combination of window dressing, bargain hunting and short covering by major players, there also have been positive business news developments. In particular, Nike solidly beat the street on earnings ($0.94 vs street $0.76, up 9.3% premarket), and Eurozone consumer prices came in much better than expected (4.3% vs street 4.5% and previous 5.2%), indicating that inflation pressures are easing across the pond as well.  

In North America this morning, US Core PCE Inflation, the Fed’s favorite measure, eased in line with expectations (3.9% vs previous 4.2%). Canadian July monthly GDP improved slightly less than hoped (0.0% vs street 0.1% and previous -0.2%).

US Chicago PMI is due at 9:45 am today (street 47.6 vs previous 48.7), followed by US Consumer Sentiment at 10:00 am. With a US government shutdown looming this weekend, we could see rumors and news related to budget talks through the day as well.  Manufacturing PMI reports from around the world start to roll out over the weekend and continue into Monday.

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Colin Cieszynski, Chief Market Strategist

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

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