Morning Minutes

Stocks Rebound as Employment Growth Beats Expectations




Bouncing back from yesterday’s US index declines of 0.5% to 1.75%, US index futures are up 0.2%-0.5%. Investors have responded favorably to better than expected US nonfarm payrolls (261K vs street 200K, last month revised up to 315K from 263K) and a big bump in Canadian job growth (108K vs street 10K). Wage inflation numbers were mixed with US average hourly earnings improving (4.7% vs previous 5.0%) and Canadian average hourly wages worsening (5.5% vs previous 5.2%).

Overseas markets and commodities have been soaring on reports that China could be preparing to reopen areas impacted by recent COVID lockdowns The Hang Seng soared 5.3% overnight which in Europe today, the Dax and FTSE are both up about 1.3%. Commodities are also climbing today with WTI Crude Oil and Natural Gas both up 3.7%, and copper up 5.1%. Although the US 10-year treasury note yield is steady near 4.1%, a correction in the US dollar appears to be underway with the greenback falling 1.6% against Gold, 1.4% against the Canadian Dollar, 1.9% against the Australian Dollar, and 0.5%-0.6% against the Euro and Pound.  

Investors have also been responding generally positively to earnings from Starbucks ($0.81 vs street $0.72, up 5.7% premarket) and Block ($0.42 vs street $0.23, up 11.3% premarket) plus sales from DoorDash ($1.70B vs street $1.62B, up 8.2% premarket. In Canada overnight and this morning, Open Text beat expectations ($1.06 vs street $1.03) while Magna International fell short ($1.47 vs street $1.49).

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Colin Cieszynski, Chief Market Strategist

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

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