Morning Minutes

Stocks Consolidate Gains as More Retailers Beat The Street



Shrugging off a bit of overseas softness overnight, US index futures are holding steady trading between -0.1% and +0.1% as investors digest yesterday’s US index gains of 0.15%-0.75%, and another round of retailer earnings.

A day after Walmart and Home Depot posted strong results, their biggest competitors are out with mixed news. Target beat the street on EPS ($3.03 vs street $2.83), and same store sales (12.7% vs street 8.2%) but indicated that it is not passing all of its cost increases along to customers, implying margins are getting squeezed. Lowes, meanwhile, posted stronger than expected earnings ($2.73 vs street $2.36) and raised its full year sales forecast. Furniture retailer La-Z-Boy also beat EPS expectations ($0.85 vs street $0.78).

Gold and silver are rallying again today with gains of 0.6% and 1.0% respectively, on the back of new inflation reports. Canadian consumer prices (4.7% vs previous 4.4%) increased again in line with street expectations.  Meanwhile in the UK, inflation pressures continue to rise with consumer prices (4.2% vs street 3.9% and previous 3.1%), retail prices (6.0% vs street 5.7% and previous 4.9%), and producer input prices (13.0% vs street 12.1% and previous 11.9%) all increasing even more than feared. Today and tonight, there are six Fed speakers, two ECB speakers, and one RBA speaker out talking so we may get even more color on what central bankers are thinking about their economies and inflation.

WTI crude oil (down 0.7%, holding $80.00/bbl) and natural gas (down 3.1%, holding $5.00/mmbtu), are backsliding today while testing key technical round numbers. DOE oil inventories are due at 10:30 am today (street 1.4 mmbbl build). Weather conditions for natural gas and speculation surrounding the potential of increased supply from stockpiles for oil continue to influence day to day sentiment.

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A replay of the SIA Wealth Market Outlook Webinar with Colin Cieszynski – Chief Market Strategist, answering the most asked questions we have received from advisors over the past month, and premiering our latest video – Competition, is now available.

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Colin Cieszynski, Chief Market Strategist

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

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