Morning Minutes

Nonfarm Payrolls and Big Tech Earnings in Focus




Today’s US employment numbers were very strong. US nonfarm payrolls were far above analyst expectations (517K vs street 185K) and just as importantly, last month’s number was revised upward (260K from previous 223K). Average hourly earnings (4.3% vs street 4.9% and previous 4.6%) indicate that wage inflation pressures are easing.  

This news has sparked a rally in the US Dollar, which is up 0.5%-0.7% against Gold, the Euro and the Canadian Dollar, and has weighed on US Index futures, which are currently down 0.5% to 1.5%. Today’s US index pullback may also be related to profit taking following gains of 3.2% for the NASDAQ and 1.5% for the S&P 500 yesterday, and a round of soft earnings reports last night.

Some of the enthusiasm generated by Meta Platforms positive report on Wednesday seems to have been dampened by a series of earnings disappointments last night from a number of senior companies including Apple ($1.88 vs street $1.94), Alphabet ($1.05 vs street $1.18, down 4.7% premarket), ($0.03 vs street $0.17, down 5.4% premarket), Starbucks ($0.75 vs street $0.77), and Ford ($0.51 vs street $0.62, down 7.6% premarket). On the positive side, Methanex ($0.97 vs street $0.60), Open Text ($1.18 vs street $1.05), and Southern Copper* ($1.17 vs street $0.83), beat expectations. We continue to move through the peak of earnings season next week headlined by Walt Disney and Warner Bros. Discovery in the US, and by Sun Life and Great West Life in Canada.

Service PMI reports have been rolling out from around the world overnight and into this morning. The majority of results, particularly from Europe, have come in above expectations and have mostly been in the 48—52 range, indicative of a neutral economy. US ISM Non-Manufacturing PMI (street 50.4 vs previous 49.6) is due at 10:00 am with investors looking for confirmation or rejection of Wednesday’s disappointing US ISM Manufacturing Report.   

*Shares of Southern Copper are held in some portfolios managed by SIA Wealth Management.

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Colin Cieszynski, Chief Market Strategist

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

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