Morning Minutes

Stocks Bounce Back as Headwinds Ease




With the US treasury note yield slipping back under 1.95%, the US Dollar slipping 0.2% against the Euro, Pound and Loonie, and WTI crude oil slipping back under $90.00/bbl, some of the recent factors pressuring stocks have eased for the moment, enabling equity markets to rebound.

Overseas markets have been in rally mode overnight. In Asia Pacific trading, Hong Kong soared 2.0%, while Sydney and Tokyo both gained 1.1%. In Europe today, the Dax is up 1.6%, while the FTSE is up 0.75%. US markets are also in the green this morning with NASDAQ futures up 1.3% and Dow Futures up 0.6%, building on yesterday’s US major index gains of 0.9%-1.3%.

The main business news events today are on the earnings side once again. Canopy Growth reported a smaller than expected loss but a 20% decline in revenues from a year ago. In the US, restaurants are in focus with Chipotle Mexican Grill beating expectations ($5.58 vs street $5.25) and Yum! Brands posting disappointing numbers ($1.02 vs street $1.09). Both companies noted they are being impacted by rising food and labor costs. Ride sharing company Lyft beat earnings expectations but is down 4.3% premarket after reporting worse than expected ridership declines.

Later today, Bank of Canada Governor Macklem is speaking with investors expecting him to continue hinting toward a March rate hike. It is unclear if he will address the impact of changing COVID restrictions, or of the recent protests in Ottawa and at some border crossings. Tomorrow morning brings the main economic event of the week, the US consumer price inflation report (street 7.3% vs previous 7.0%).

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Colin Cieszynski, Chief Market Strategist

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

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