Morning Minutes

Stocks Bounce Back As Focus Turns To Earnings




Stock markets in North America and Europe have been on the rebound to start the new trading week, clawing back a good chunk of Friday’s losses. US index futures are up 1.0%-1.6% compared with Friday’s declines of 1.3%-3.0%. European trading finds the FTSE up 0.9% and the Dax up 1.1%.

The waves of troubling economic news that rocked the markets last week have subsided for the moment and focus has turned to earnings season which ramps up this week. Bank of America beat the street on both EPS ($0.81 vs street $0.77) and sales ($24.6B vs street $23.5B) as stronger traditional banking offset weakness in investment banking. Some of the notable companies reporting results this week include Netflix and Goldman Sachs on Tuesday, Tesla Motors and IBM on Wednesday, Snap and Union Pacific on Thursday, and American Express on Friday.

Most of the big economic reports of this week come from outside of the US including tonight’s big Chinese GDP and retail sales numbers, and inflation plus retail sales data for Canada and the UK. Economic news out of the US is mainly focused on the housing market.

Amid more reports that the UK government may walk back more of its recent, unpopular, mini-budget proposals, the British Pound is up 1.5%. The US Dollar has generally backed off a bit enabling Gold to rally 1.3%, the Canadian Dollar to gain 0.8% and the Euro to bounce 0.6%. In commodity action, Copper is up 0.8%, WTI crude oil is up 0.3% but natural gas has plunged 6.6%.     

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Colin Cieszynski, Chief Market Strategist

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

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