Morning Minutes

OPEC+, Merck Follow-through and Evergrande In Focus To Start The Week



US index futures are struggling to build on Friday’s 0.8%-1.4% US market rebound with Dow futures down 0.3% and NASDAQ futures down 0.6%. European indices including the Dax and FTSE are pretty much flat so far today.

Friday’s US market rally was sparked by Merck’s positive clinical trial results for its COVID treatment candidate drug, which sparked a rally for Merck, put pressure on COVID vaccine competitors, and renewed interest in lockdown impacted sectors. Today we may get a better idea of whether this was a one-day play or the start of a more significant shift in sentiment. In premarket action, Merck is up 2.8% adding to Friday’s 8.3% gain. Moderna, on the other hand, is down 5.0% premarket adding to Friday’s 11.3% loss.  

Asia Pacific markets sold off overnight with the Hang Seng plunging 2.1% and the Nikkei dropping 1.1%. China’s troubled real estate giant Evergrande was halted overnight pending a potential transaction announcement which could potentially involve a full or partial sale of the company or its real estate holdings, a refinancing, or maybe something else.  

WTI and Brent crude oil are both trading up 0.2% this morning as traders await results from today’s OPEC+ meeting on production levels. Currently the group is reintroducing previously curtailed supply at a rate of 400,000 bbl/d per month. While this is widely expected to continue, any surprise change could potentially spark a trading reaction. Natural gas, meanwhile, is up another 1.3% today.

Earnings confession season continues this week with the risk of supply chain disruption misses still lingering out there. It’s a busy week for economic news, headlined by US nonfarm payrolls and Canada employment on Friday, US ADP payrolls on Wednesday, US factory orders later today, service PMI reports tomorrow and central bank meetings for Australia and New Zealand.

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Colin Cieszynski, Chief Market Strategist

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

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