Morning Minutes

STEADY STOCKS AWAIT BIDEN SPEECH AND EARNINGS SEASON

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US stocks remain in a holding pattern ahead of tomorrow’s kickoff to earnings season. US index futures are flat to up 0.3%, similar to yesterday’s flat to 0.4% return. Overseas markets were also mildly positive with the Dax up 0.2%, the FTSE up 0.5% and the Hang Seng up 0.9%. Energy and metals trading is also quiet so far today with Gold down 0.7%, Copper up 0.6% and WTI crude oil down 0.6%.

Investors appear to be sitting on their hands awaiting a flurry of developments over the next 24 hours. This evening, President-Elect Joe Biden is expected to outline his plans for dealing with the current wave or COVID 19 including vaccinations, fiscal stimulus and possibly other initiatives. This afternoon, Fed Chair Powell and three other FOMC members are set to speak which investors may look to for hints of whether the central bank is planning to bring in additional stimulus to deal with the current round of lockdowns.

Ahead of tomorrow’s formal kickoff of earnings season, there are a number of corporate reports out today. Delta Air Lines reported a slightly worse than expected loss (-$2.53 vs street -$2.50) but mentioned that it cut its cash burn rate by about 50% in the latest quarter. Retailer Nordstrom announced a holiday season same store sales plunge of 22% from a year ago indicating discretionary retailers, particularly in clothing, continue to struggle, but also that consumers continue to shift spending online with a 54% increase in online sales over a year ago.

In economic news, China announced a stronger than expected trade surplus ($78.1B vs street $72.3B) boosted by higher than expected export growth (18.1% vs street 15.0%). Imports were also higher than expected (6.5% vs street 5.0%), a positive indicator of growing demand for commodities.

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

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