Morning Minutes

Stocks Rally With Earnings and Economic News In Focus




Building on yesterday’s gains of 0.9% to 1.1% for US markets including a record-high close for the Dow above 34,000 for the first time, US index futures are up 0.2% to 0.3% this morning. Overseas markets have generally been climbing overnight led by a 1.0% gain for the Dax and advances of 0.5% to 0.6% for the FTSE and the Hang Seng. It’s expiry day for equity and some other monthly options contracts, so we may be seeing some squaring off of positions.

Investors continue to respond positively to a retreat for the US 10-year Treasury Note yield back into the 1.50%-1.60% range and to more positive earnings reports. Continuing a run of strong numbers out of big US banks and brokerages, Morgan Stanley* beat the street on EPS ($2.22 vs street $1.70) and revenues ($15.7B vs street $14.1B) boosted by stronger than expected bond trading, equity trading, and investment baking results. Meanwhile, in economic news both US building permits (1.766M vs street 1.750M) and housing starts (1.739M vs street 1.613M) beat expectations.   

Overnight economic news out of China was mixed and apparently quite distorted by the COVID pandemic. Q1 GDP was up 18.3% over year compared with 6.5% annualized growth in Q4, but this was short of the 18.9% street estimate. Industrial production for March also disappointed (14.1% vs street 17.2%) but retail sales exceeded expectations (34.2% vs street 28.0%).

Precious metals are bouncing back a bit this morning with gold up 0.9% and silver up 1.2%. Cryptocurrencies are backsliding today with Bitcoin falling 3.7% toward $61,000 as Coinbase started to fade, falling 2.0% on its second day of trading.

*Morgan Stanley is held in some portfolios managed by SIA Wealth Management.

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Colin Cieszynski, Chief Market Strategist

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

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