Morning Minutes

Stocks Creep Upward as US Earnings Season Starts



Building on yesterday’s gains of 0.1%-0.3% for major US indices, US index futures are up another 0.1% this morning. The Dax, FTSE and Hang Seng are all up 0.1% today. The Nikkei fell 1.0% overnight with the Yen rallying 0.3% against the US Dollar.

Commodities are giving back some of their recent gains with copper backsliding 0.4% but holding above its $4.50/lb breakout point. Natural gas is down 3.75% with the recent cold snap easing in some regions ahead of the weekly storage report (street -173 BCF vs previous -31BCF). WTI crude oil is down 0.4% but still trading above $82.00/bbl even after another big US weekly drawdown announced yesterday (-4.5 mmbbls vs street -1.9 mmbbls).

Federal Reserve Board Vice-Chair nominee Lael Brainard’s nomination hearing is today, with investors looking to see if she maintains the party line of a strong economy and high inflation supporting several interest rate hikes this year. Historically Brainard has been one of the most dovish FOMC members. Inflation pressures remain high. Coming off of yesterday’s 7.0% consumer price inflation print, its highest since 1982, US producer prices were reported at 9.7% for December, up from 9.6% a month earlier but slightly below the 9.8% street estimate. US jobless claims, meanwhile, were worse than expected (230K vs street 200K), extending the disappointment from last week’s US nonfarm payrolls report.   

While the big official kickoff to earnings season is tomorrow with several big banks reporting results, there have been a few positive corporate developments today. Delta Air Lines beat the street on earnings ($0.22 vs street $0.14) and management indicated that it expects travel to rebound strongly this year from the current Omicron wave bumps. Homebuilder Lennar announced a 50% dividend increase and is up 2.8% in premarket action.

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Colin Cieszynski, Chief Market Strategist

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

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