Morning Minutes

Stocks Climb, Copper Soars as Earnings and Inflation Battle for Attention




US index futures are up 0.1% to 0.5% this morning, as stocks once again attempt to regain their footing and shrug off yesterday’s declines of 0.1% to 0.4% for the three main US indices. Moves by the US to improve transportation, with plans to run west coast ports 24/7 to ease bottlenecks and to reopen its land borders with Canada and Mexico to vaccinated travelers next month seem to have been well received by the street so far.

Earnings season has started in the US this morning with three better than expected reports from JPMorgan Chase ($3.74 vs street $3.00), BlackRock ($10.95 vs street $9.35) and Delta Air Lines ($0.30 vs street $0.17). Managements indicated that they were able to weather a number of challenges in the quarter including the COVID delta variant, supply chain disruptions and rising fuel costs.

JPMorgan and Blackrock are up slightly in premarket trading while Delta is down slightly, suggesting that positive results may have already been priced in by investors, while also suggesting that investors aren’t looking for a reason to run for the hills either. As earnings continue to roll out over the rest of this week and the rest of this month, we may get a better idea of where investor sentiment is at.  

US index futures have turned downward in the last few minutes after investors found out that inflation pressures continue to grow with US consumer prices (5.4% vs street 5.3%) increasing slightly more than expected. 

Overnight, China announced a larger than expected trade surplus ($66.7B vs street $47.6B), built on a combination of larger than expected export growth (28.1% vs street 21.5%) and smaller than expected import growth (17.6% vs street 19.2%).

Commodity action is mixed this morning with energy contracts like WTI crude oil and Natural Gas both falling 0.6% in what so far looks like normal trading corrections. Metals appear to be getting a boost from the China trade numbers, particularly copper which is up 2.0%.

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Colin Cieszynski, Chief Market Strategist

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

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