Morning Minutes

Steady Stocks Await Earnings Reports and Central Bank Decisions




Stock markets around the world are mixed to start the new trading week. US index futures plus the Dax and FTSE are all between +0.2% and -0.2% this morning while in Asia Pacific trading the Nikkei gained 0.4% while the Hang Seng lost 0.4%. The US treasury yield is up slightly trading near 1.60%.

Weekend news was mixed. The US CDC and FDA regulators allowed the use of Johnson & Johnson’s COVID vaccine to resume after an investigation into reports of blood clotting, but the spread of new cases in India has continued to spiral upward. Commodities are mixed today with WTI crude oil down 1.5% but copper up 1.9%. Oil may remain active through the week with OPEC meeting on Wednesday. With oil weakening today, CAD is down 0.3% against USD while other major paper currency pairs along with precious metals are quiet. Cryptocurrencies are on the rebound this morning with Bitcoin regaining $50,000 and advancing on $53,500 with an 8.2% rally.

It’s a quiet morning for corporate news but earnings season resumes later today with results from Tesla* and Canadian National Railway due this afternoon. The rest of the week brings a flurry of results from Big Oil, Big Pharma, Big Tech and other groups ahead of month-end. Highlights of the next few days include: Google, Microsoft and Visa Tuesday, Apple, Boeing, Facebook, Ford, Shopify and Restaurant Brands Wednesday,, Caterpillar*, MasterCard, McDonalds, Merck, Newmont, Twitter and others Thursday, wrapping up with Exxon Mobil, Chevron, Imperial Oil and AstraZeneca on Friday.  

Wednesday evening US President Biden delivers a prime-time speech to Congress which investors may particularly watch for indications on potential tax changes or hikes for individuals or corporations, particularly after last week’s hints about a possible capital gains tax increase for high earners. There are two notable central bank meetings this week, the Bank of Japan tonight and the US Federal Reserve Board on Wednesday. Recent market action suggests that investors are expecting both central banks to keep the pedal to the metal on stimulus, but any hints toward taking the foot off the gas in future (like the Bank of Canada did last week) or trimming around the edges (like the Fed did by restoring bank capital requirements last month), could attract attention from the street.

The last week of the month brings a flurry of economic announcements including US durable goods orders this morning which bounced back in March but not as much as the street had hoped (0.5% vs street 2.5% and previous -0.9%). Retail sales for Canada are out on Wednesday, followed by US Q1 GDP on Thursday. The week wraps up with manufacturing plus service PMI reports for China and the US Chicago PMI report ahead of the usual deluge of PMI reports to kick off the new month next week.

*Shares of Tesla and Caterpillar are held in some portfolios managed by SIA Wealth Management.

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Colin Cieszynski, Chief Market Strategist

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

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