Morning Minutes

Retailer Earnings and Flash PMI Numbers Share the Spotlight



With a day and a half to go before US markets slow down for the Thanksgiving holiday break, the pre-holiday flood of news has started.

It’s already a big week for US retailers with Black Friday coming up and several major US chains have posted earnings results overnight and this morning. Stocks of those who did are struggling, even those with good numbers. Notables include Best Buy (EPS $2.08 vs street $1.19 but stock down 11.5% premarket after management suggested sales growth could slow in the coming quarter), Dick’s Sporting Goods ($3.19 vs street $1.97, same store sales 12.2% vs street 1.9%, down 3.75% premarket), Urban Outfitters ($0.89 vs street $0.84, down 11.0% premarket), and Abercrombie ($0.86 vs street $0.66, down 7.5% premarket). Later today meme video game retailer Gamestop reports results. Zoom Video also beat expectations ($1.11 vs street $1.09) but the stock is down 9.4% premarket with investors apparently concerned that workers returning to their offices could slow growth.

A day after the NASDAQ dropped fell 1.3%, NASDAQ futures are down another 0.3%, while Dow and S&P futures are steady. Overseas market action has been mixed with the Hang Seng down 1.2%, the Dax down 0.6% while the FTSE and Nikkei are up 0.1%. WTI crude oil is down another 0.3% as the US and several other countries keep talking about releasing supply from stockpiles to put a lid on prices. Natural gas has rebounded 3.6% this morning.

The US Dollar is on the rise this morning, gaining 0.9% against gold, 2.4% against platinum, and 0.3% against the Canadian Dollar as investors consider President Biden’s decision to keep Fed Chair Powell on for another term while appointing Governor Brainard Vice-Chair as a sign that the US central bank may remain hawkish and could accelerate its tapering program if inflation remains a problem.

Flash Manufacturing and Service PMI reports for the UK, Germany, France and the EU are out this morning and across the board, results arrived in the mid to high 50s and above street expectations, indicating a moderate expansion. US flash Manufacturing PMI (street 59.0 vs previous 58.4) and flash Service PMI (street 59.1 vs previous 58.7) reports are due at 9:45 am EDT today.  

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Colin Cieszynski, Chief Market Strategist

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

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