Morning Minutes

Stocks Climb Through A Quiet Confession Season




Investors continue to respond positively to a very quiet confession season, the time between the end of the calendar quarter and the start of earnings season when companies who have disappointing news often put out profit warnings. The only corporate results of note overnight were positive with Costco reporting that its same store sales were up 16.0% over year in March and online sales were up 57.7%.  

With the US 10-year treasury note yield holding steady near 1.65%, US index futures are flat (Dow) to up 0.8% (NASDAQ) with investors responding positively to yesterday’s FOMC minutes which confirmed that the US central bank intends to remain dovish/supportive until a recovery is well underway and also to reports that the Biden Administration is open to negotiations around its proposed corporate tax increase.

Overseas, the Hang Seng rallied 1.1% overnight, while the FTSE is up 0.5% and the Nikkei plus the Dax are flat. UK Construction PMI accelerated and came in well above expectations (61.7 vs street 54.6 and previous 53.3) continuing a parade of positive economic numbers over the last week.

Coming off of yesterday’s surprisingly strong Canadian Ivey PMI report (72.9 vs street 60.5), Canadian employment for March is due tomorrow morning (street 100K vs previous 260K) which may give an indication of whether, despite lockdowns, the economy is getting strong enough for the Bank of Canada to start scaling back asset purchases as it has previously hinted. US initial jobless claims were disappointing for the second week in a row (744K vs street 680K), while continuing claims were steady (3.734M vs street 3.650M and previous 3.750M).

Metals are up this morning with copper and silver both climbing 0.8% while gold is up 0.4%. The energy group is struggling with WTI crude oil down 0.25% and natural gas down 1.1%. Cryptocurrencies continue to attract support with Bitcoin up 2.0% trading near $57,000.  

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Colin Cieszynski, Chief Market Strategist

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

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