Morning Minutes

Stocks Keep Climbing as Earnings Season Rolls On



Overseas stock markets built on yesterday’s US rebound overnight, led by the Nikkei soaring 2.4%. The Dax and the Hang Seng both gained about 0.5% while the FTSE is up 0.2% today. US index futures are steady, consolidating yesterday’s gains of 0.9% to 1.2% for the three big indices and a 2.3% pop for the Russell 2000.

Investors continue to respond favorably to stronger than expected earnings reports coming out from a wide cross-section of sectors. Notable reports include: appliance producer Whirlpool ($7.20 vs street $5.41), Chipotle Mexican Grill ($5.36 vs street $4.89, same store sales up 17%), Southwest Airlines (-$1.72 vs street -$1.85), and AT&T ($0.86 vs street $0.78).  

Economic news continues to indicate an improving North American economy. US weekly jobless claims of 547K beat the 617K street estimate and were the lowest weekly reading since March of 2020. Monthly growth in Canadian new house prices slowed in March to 1.1% from 1.9% in February and came in below the 1.4% street estimate suggesting that the red-hot housing market may be cooling slightly.

Yesterday, the Bank of Canada gave the economy a big vote of confidence in the face of current lockdowns by reducing its weekly asset purchases to $3B from $4B and moving up its forecast of the economy being strong enough to allow rate hikes to the second half of 2022 from sometime in 2023. The European Central Bank maintained its current benchmark interest rate and asset purchase program at its meeting this morning.  

A busy day for US earnings reports continues after the close with Intel, Mattel and Union Pacific headlining, followed by American Express and Schlumberger tomorrow morning.

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Colin Cieszynski, Chief Market Strategist

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

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