Morning Minutes

Russia Production Cut, Earnings Misses and Canada Job Growth In Focus




Continuing yesterday’s pullback which saw US indices decline 0.75% to 1.00%, US index futures are down 0.4% to 0.9% this morning. European markets are also in retreat today with the Dax declining 1.6% and the FTSE falling 0.7%. With the weekend approaching it remains to be seen if profit takers will retain their current upper hand or if bargain hunters are willing to step in and provide support.

WTI Crude Oil is up 1.25% today after Russia announced plans to cut production by 500,000 bbl/d starting in March apparently as a result of deepening sanctions. Natural Gas is also up today with a 1.1% gain. Metals, however, are struggling with Copper down 1.2% and Gold down 0.2%.

US earnings reports out overnight were mixed. Lyft is down 31.4% in premarket action after reporting a surprise loss (-$0.76 vs street +$0.13) and putting out disappointing guidance. Expedia ($1.26 vs street $1.71) also fell short of expectations, while Paypal beat estimates ($1.24 vs street $1.20). Canadian earnings were disappointing today as well with Magna ($1.22 vs street $1.35, down 8.6% premarket) and Enbridge ($0.63 vs street $0.73) both missing analyst forecasts.

The Canadian Dollar has rallied 0.5% against the US Dollar this morning on the back of a very strong Canadian employment report. Echoing last Friday’s big US Nonfarm Payrolls print, Canada added 150K jobs last month, well above the 15K the street was expecting, and indicating the North American job market remains robust. Average hourly wages declined to 4.5% from 4.7% in December, indicating that wage inflation pressures continue to ease.

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Colin Cieszynski, Chief Market Strategist

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

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