Morning Minutes


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True TacticalTM - engineer analyzing document with statistics



Despite the general tone of news flow remaining positive, stock markets around the world are pulling back ahead of the weekend. Part of this may be a shift in sentiment from anticipation to realization now that the Biden Inauguration is over, US politicians are getting down to work and earnings season is underway.

US index futures are all down about 0.7% with Dow futures down about 240 points coming off of an essentially flat Thursday. NASDAQ futures are down 0.6% erasing yesterday’s 0.5% gain. Major European indices are down across the board with Milan falling 1.9%, Frankfurt down 0.6% and London losing 0.8%.

The ongoing tug of war between concerns about the negative impact of near-term lockdowns and hopes for a long-term recovery as vaccines roll out appears to have tipped to the bearish side for the moment, amid reports of delays on vaccine shipments and flash PMI reports. The first, early look at the January economy for Europe (Manufacturing 50.8 vs street 50.3, Service 47.5 vs street 47.6) split with manufacturing near the 50.0 line and services below 50 in contraction territory. Results from the UK were similar and came in below expectations, with services particularly disappointing (Manufacturing 52.9 vs street 54.0, Services 38.8 vs street 45.0).

US flash PMI reports are due at 9:45 am today with the street expecting both Manufacturing (street 56.5 vs previous 57.1) and Services (street 53.8 vs previous 54.8) to show some slowing but also to remain above 50 in expansion territory. Canadian retail sales beat expectations but the report was for November, before the latest round of lockdowns really took hold.

Amid soft flash PMI reports and bulls taking a day off, commodities are trading lower this morning with WTI crude oil down 3.1%, natural gas down another 1.9% and copper falling 2.2%. This US dollar is on the rebound this morning, knocking gold and silver down 1.5% and 2.6% respectively.

Several companies are trading down in premarket action today despite releasing positive earnings reports, suggesting that following several months of gains, some investors may be looking to take profits against news. Today’s headliners include: IBM (down 8.2%, premarket EPS $2.07 vs street $1.79), Intel (down 4.8% premarket,  EPS $1.52 vs street $1.10, 5% dividend increase), Seagate Technology (down 4.5% premarket, EPS $1.29 vs street $1.13), and railroad CSX (down 2.2% premarket, EPS $1.04 vs street $1.01). Canada’s Sierra Wireless is up 8.7% in US premarket action after announcing the start of a leadership transition with its current President and CEO planning to step down at the end of June.

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Colin Cieszynski, Chief Market Strategist

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

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