Morning Minutes

Retail Sales and Retailer Earnings In Focus




US index futures are down 0.2%-0.4% this morning giving back some of yesterday’s gains as investors digest a flurry or retail related announcements and political developments. European markets are under pressure this morning with the Dax down 1.0% amid rising political tensions after an errant missile, apparently fired by Ukraine forces in defense against a Russian missile barrage, landed in Poland, reminding investors that the Ukraine-Russia war remains a volatile situation.

US retail sales (1.3% vs street 1.0% and previous 0.0%) and retail sales excluding autos (1.3% vs street 0.4%) were much stronger than investors had anticipated. US retailer earnings, meanwhile, have been mixed this morning. Lowes ($3.27 vs street $3.10, up 1.7% premarket) beat expectations. Target’s EPS ($1.54 vs street $2.13, down 14.8% premarket) missed badly due to deep discounts for inventory clearance, and management cut its Q4 sales guidance. Results from Canadian grocers were better than expected, as both Loblaw ($2.01 vs street $1.96) and Metro ($0.92 vs street $0.90) beat street expectations.   

Inflation and housing are in the news again today. Core Canadian consumer prices (5.8% vs street 6.3%) were better than expected; another sign of easing inflation in North America. Canadian housing starts came in soft (267K vs street 270K and previous 298K).  In the UK, consumer prices (11.1% vs street 10.7% and previous 10.1%) accelerated more than expected, while house price growth slowed significantly (9.5% vs street 14.5%).  US industrial production is due at 9:15 am EDT this morning, followed by US housing starts tomorrow morning.

Commodities are in retreat this morning with Copper and WTI crude oil both down 1.1%, and Natural Gas down 2.8%. Gold is up 0.3% along with the Canadian Dollar, Yen and Pound, while the Euro is up 0.5% as the US Dollar backslides.

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Colin Cieszynski, Chief Market Strategist

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

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