Overnight and premarket action in equity markets suggests that Friday’s big afternoon turnaround in North America amounted to little more than short-covering and bargain hunting. US index futures have resumed their downward course with Dow futures down 0.5% and NASDAQ futures flat. European action finds the FTSE flat and the Dax up 0.5%. Many Asia Pacific markets were closed but Sydney fell 0.25% while Tokyo climbed 1.0%.
Commodity market action has been more positive. Another big East Coast storm has Natural Gas up 3.9% today while WTI crude oi is up 0.3% and Copper is up 0.3%. In currency action, Gold is up 0.4%, while Bitcoin is down 1.4%.
Ahead of today’s Lunar New Year holiday, China released mixed Manufacturing (50.1 vs street 50.0), and Non-Manufacturing (49.1 vs street 50.4) PMI reports. The turn of the month brings a flurry of economic announcements through the week including Chicago PMI at 9:45 am EDT (street 61.7 vs previous 63.1), manufacturing PMI world wide tomorrow, US ADP payrolls on Wednesday, Service PMI numbers on Thursday and wrapping with the US nonfarm payrolls and Canada employment on Friday.
With the Bank of England and the European Central Bank both meeting on Thursday, how much pressure central banks are under to take action may remain a big focus, including the price component of PMI reports and wage inflation numbers later in the week. Canadian producer price inflation numbers showed price pressures from raw materials softening a bit (-2.9% over month vs street +0.6%).
Earnings season picks up again tomorrow. It’s a big week for corporate results across a number of sectors led by Big Oil (ExxonMobil, ConocoPhillips, Suncor Energy, Imperial Oil), Big Tech/Communications (Alphabet, Meta Platforms, Amazon.com, BCE), Big Autos, Big Pharma, Big Insurance and others. Corporate news is light today but Blackberry is down 5.1% premarket after agreeing to sell its non-core patent portfolio for $600 million.
SIA Wealth In The Media:
Chief Market Strategist Colin Cieszynski appeared on BNN Bloomberg recently where he discussed the impact of inflation on investing, the economy and corporate earnings.
Inflation takes a bite out of growth, the economy, and companies: Colin Cieszynski