Morning Minutes

Rising Yields Send Stocks Lower, Bank of Canada Meets Today

Bank of Canada



September has historically been the seasonally weakest month of the year for stocks and so far this month has been no exception. Adding to yesterday’s major US index losses of 0.1%-0.6%, the three main US index futures contracts are all down about 0.2%. Investors appear to still be focused on the potential that US interest rates may remain higher for longer and could even continue to climb as the 10-year US Treasury Note Yield has climbed up to 4.35%.

Overseas market action has been choppy with the Dax down 0.5%, and the FTSE falling 0.7%, while the Nikkei has climbed 0.6%. WTI Crude is giving back some of yesterday’s rally sliding 0.5%, but still holding well above $85.00/bbl. Natural Gas is up 0.6%. In metals action, copper is down 0.9% while Platinum is down 1.4%.

10:00 am EDT is looking to potentially be a busy time today. The Bank of Canada is widely expected to hold its overnight rate at 5.00%, echoing a hold decision from the Reserve Bank of Australia earlier this week. Comments from Governor Macklem on the state of the Canadian economy, the fight against inflation and the outlook for interest rates may attract attention. Meanwhile in the US, investors may look to Service PMI reports for indication of whether last week’s soft Manufacturing Survey was a sign of a wider problem or relatively contained, a theme that may also run through analysis of this afternoon’s Fed Beige Book regional economic report. Two FOMC members are also speaking 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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