Yesterday’s US stock market rebound which saw the three main indices claw back morning losses to finish with gains varying between 0.25% for the Dow and 1.6% for the NASDAQ, appears to have been a dead cat bounce. This morning finds US index futures in retreat all falling about 0.2%. Overseas market action has been mixed overnight indicating that there wasn’t much follow-through from the US bounce. The FTSE is down 0.6%, the Dax is up 0.2%, Shanghai gained 2.4%, the Hang Seng was flat, and the Nikkei slipped 0.1%.
It was a big day for Australia where its central bank finally joined the tightening parade by raising its benchmark interest rates by 0.25% to 0.35%, which was more than the 0.15% hike the street had expected, and also announced that it will start allowing its balance to shrink by not replacing bonds as they mature. This news sent the Australian Dollar soaring by 1.0%, and the S&P/ASX 200 down 0.4%. This move appears to have added to speculation that central banks could tighten more aggressively moving forward, seen by the US 10-year treasury note yield approaching 3.00% ahead of tomorrow’s Fed decision.
Today is a quiet day for economic news but tomorrow is much busier with the FOMC, ADP payrolls and Service PMI on the docket. It’s another big day for earnings reports, headlined by positive results or guidance from Restaurant Brands ($0.64 vs street $0.55), Nutrien ($2.70 vs street $2.78, raised 2022 EPS guidance to $16.20-$18.70 above street $15.11), Pfizer ($1.62 vs street $1.47), Expedia (-$0.47 vs street -$0.62), and Hilton ($0.71 vs street $0.65). The most notable miss was Biogen ($3.62 vs street $4.38). Later today, results are due from Prudential, Lyft, Caesars, Air BnB, Starbucks, and others.
Commodity market action is very mixed today. Natural gas is spiking 5.9% this morning amid more chatter about more European countries potentially banning energy imports from Russia. WTI crude oil is down 0.2% but holding steady near $105.00/bbl. In metals trading, Platinum is up 2.2%, Copper is up 0.7% and gold is flat, digesting recent losses.