US index futures are up 0.5%-0.8% this morning, essentially clawing back yesterday’s losses. A day that had started off strong in the states turned sour after the National Association of Homebuilders monthly US market index plunged off a cliff (55 vs street 65 and previous 67), and Apple warned about plans to slow hiring.
Recent corporate news out of the US has centered around the impact of a slowing economy and a soft stock market on banks. With results broadening into more sectors overnight and into this morning, a new monkey wrench has been thrown into the works, the impact of the rising US Dollar. Despite beating market expectations on earnings ($2.31 vs street $2.27), IBM is down 5.4% in premarket action after Big Blue’s management cut its free cash flow guidance for this year, blaming the negative impact of a higher dollar. Johnson & Johnson also cut guidance this morning, blaming a combination of the higher dollar and operational problems.
In other earnings news, driller Halliburton ($0.49 vs street $0.45) and toymaker Hasbro ($1.15 vs street $0.94) both beat the street. Tonight Netflix reports results with investors concerned about potential subscriber losses and profitability, which could influence sentiment toward streaming and other communications stocks.
Speaking of the US Dollar, it has started to drop back today, losing 1.1% to the Australian Dollar, 0.9% to the Euro, as EURUSD has rallied up above $1.0200, and 0.2% to the Canadian Dollar, with USDCAD falling back under $1.3000. Commodities have been giving back some of yesterday’s gains with WTI crude oil down 1.3%, natural gas down 3.5%, and copper down 1.8%.
SIA Wealth In The Media:
Chief Market Strategist Colin Cieszynski appeared on BNN Bloomberg where he discussed the importance of intraday market action, along with recent trends in relative strength, tactical rotation into cash and earnings season.