Morning Minutes

Mixed Markets Digest Weak Earnings and Soft Flash PMI Reports




US index futures are mixed this morning with NASDAQ futures falling 0.3% as investors digest poor numbers from social media stocks, while Dow futures are up 0.2%. Over in Europe today, the Dax is up 0.3% while the FTSE is up 0.3%.

Snap, parent of Snapchat, is down 32.7% in premarket trading this morning after losses and sales ($1.11B vs street $1.14B) came in below expectations.  Management pulled its guidance for the coming quarter and announced plans to slow hiring, blaming slowing advertising spending. Twitter also posted a big miss on earnings (-$0.08 vs street +$0.14) which management blamed on weakening ad spending and distractions/uncertainty related to Elon Musk’s takeover drama.

 In other earnings related action, disk drive producer Seagate is down 10.7% premarket after the company reported disappointing earnings ($1.59 vs street $1.89) and next quarter guidance ($1.20-$1.60 vs street $2.22). On the positive side, credit card provider American Express is up 4.9% premarket after beating the street on earnings ($2.57 vs street $2.42)

Adding to a series of troubling economic numbers from around the world this week, UK retail sales fell off even more than feared (-5.8% vs street -5.3%) in June. Canadian retail sales for May, on the other hand, were better than expected (2.2% vs street 1.6%).  

Flash PMI reports from around the world have been rolling out overnight and into this morning. The overall tone has been one of sluggish, barely growing economies with Japan slightly worse than expected and the UK slightly better than expected. Most troubling were the flash manufacturing PMI numbers for Germany, France and the EU, all of which fell under 50 into contraction territory. US flash manufacturing (street 52.0 vs previous 52.7) and flash service (street 52.6 vs previous 52.7) are due at 9:45 am EDT.

Commodity and currency trading is also mixed this morning. Copper is up 1.2% today but WTI crude oil is down 0.5%. Gold is up 0.5% against the US Dollar today, but the Euro is down 0.5%, dragged lower by the weak European Flash PMI reports. Cryptocurrencies continue to rebound with Bitcoin up 2.5% and Ethereum up 4.2%. Focus in currency markets, particularly the US Dollar remains squarely on next Wednesday’s big Fed interest rate decision.

SIA Wealth In The Media:

Chief Market Strategist Colin Cieszynski appeared on BNN Bloomberg today where he discussed tactical investing strategies, recent earnings related market action and relative strength in currency markets.

SIA Wealth portfolios recently moved to 100% cash: Chief market strategistThe implications of a strong U.S. dollar for different companies

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Colin Cieszynski, Chief Market Strategist

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

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