Morning Minutes

Quadruple Witching Day and Flash PMI




US index futures are down again this morning with declines of 0.4% to 0.8% adding to Thursday’s US index losses of 2.2% to 3.2%. Investors still appear to be reeling from yesterday’s disappointing US national retail sales and industrial production reports plus poor regional manufacturing surveys from New York and Philadelphia. Major European markets are also down across the board with the FTSE falling 1.1% and the Dax down 0.5% as investors continue to react to yesterday’s hawkish comments from the ECB. Signs of a slowing economy appear to be dragging on energy contracts today with WTI Crude Oil down 2.4% and Natural Gas down 7.2%.  

Today is Quadruple Witching Day when a multitude of index and single stock futures and options all expire, which could be adding to recent volatility as investors square positions. It’s tax loss selling season and with equity markets still down significantly year to date, that may not be helping the situation either.

Flash PMI reports, the first peek at Manufacturing and Service economies from around the world have been rolling out overnight. For the most part, numbers have been coming in between 47.0 and 52.0 suggestive of a slight contraction or slight expansion. Japan, Germany and the Eurozone were slightly better than expected, Australia was slightly worse than last month while France and the UK were mixed. The UK had the most notable number, a flash Manufacturing PMI disappointment (44.7 vs street 46.3). Ominous signs for the UK economy also appeared in a disappointing retail sales report (-5.9% over year vs street -5.6%).

In North America today, Canada new house price growth slowed again in November (4.1% vs previous 5.1%). US Flash Manufacturing PMI (street 47.7) and Flash Service PMI (street 46.8) are due at 9:45 am EST today.

Interestingly, earnings reports that have come out overnight and this morning have generally been coming in better than expected with Adobe ($3.60 vs street $3.50, up 5.1% premarket) the biggest name, and recreational vehicle producer Winnebago ($2.07 vs street $1.82), perhaps the most interesting name considering the state of the economy.

Cryptocurrencies are getting hammered again with Bitcoin dropping 2.5% and Ethereum falling 5.0%. Accounting firm Mazars Group announced it is pausing work for all of its crypto related clients including Binance and  

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Colin Cieszynski, Chief Market Strategist

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

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