Morning Minutes

Stocks Rebound On Positive Bank and Retailer Earnings

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Shrugging off a flat to slightly lower Tuesday, US index futures are posting moderate gains this morning, varying between 0.2% for Dow Futures to 0.6% for NASDAQ Futures. Cryptocurrencies are also on the rebound today, with Bitcoin climbing 7.2% and regaining $50,000. Commodities are also rallying today for the most part with WTI crude oil up 1.0%, platinum up 2.7%, copper up 0.8% and silver up 0.7%. Natural gas is down another 0.8% as the impact of recent storms on supply fades and warming temperatures in consuming regions ease seasonal demand.

The broad market bounce in the US which started yesterday appears to have been sparked by comments from Fed Chair Powell who through comments related to continuing economic uncertainty and soft inflation, hinted that the Fed isn’t planning to cut back on stimulus any time soon. Today Powell’s testimony continues and other Fed members are out speaking, including Brainard and Clarida, which the street may look to for additional color on what the Fed is currently thinking. Later today, the Reserve Bank of New Zealand is meeting who may give some insight into overseas economic conditions   

Earnings reports, mainly from Canadian banks and US retailers once again dominate today’s news calendar. Highlights include:

Royal Bank of Canada beat the street on EPS ($2.69 vs street $2.28) boosted by 21% growth in its capital markets business and an improvement in credit conditions that saw loan loss provisions decline to $110M from $427M last quarter. National Bank of Canada also exceeded EPS expectations ($2.15 vs street $1.71) helped by broad-based growth across its business lines and a decline in loan loss provisions to $81M from $89M last quarter.

Lowes’ earnings per share came in well above expectations ($1.33 vs street $1.21), propelled by same store sales growth (28.1% vs street 22.0%).  This continues a trend of strong home improvement numbers building on Home Depot’s results from yesterday. Digital payments provider Square also exceeded expectations on earnings ($0.32 vs street $0.24). Later today, results are due from Nvidia.

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Colin Cieszynski, Chief Market Strategist

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

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