Morning Minutes

Stocks Stage a Small Rebound Despite Weakening Corporate Guidance




Stock markets around the world have been trying to bounce back from yesterday’s selloff but have only been able to claw back some of their losses. NASDAQ futures are up about , which is encouraging but less than yesterday’s 2.8% plunge. Similarly, Dow futures are up 0.4% compared with a decline yesterday of 1.6%.

With the US 10-year treasury note yield levelling off near 1.50% the US Dollar has backed off slightly enabling the Euro to rebound 0.2%, gold to bounce back 0.4% and Bitcoin to recover 1.9% of their recent losses. Commodities, however, remain under pressure. WTI crude oil is down 0.5% and natural gas is down 2.0% as energy contracts return some of their recent gains, while copper is down 0.4%. Last night API reported a 4.1 mmbbl increase in its weekly US oil inventories. DOE weekly oil inventories are due at 10:30 am EDT with the street expecting a 1.6 mmbbl drawdown, so there is potential for a negative surprise.

Canada industrial prices (-0.3% vs previous -0.4%) and raw material prices (-2.4% vs previous +2.2%) indicate that inflation pressures may be starting to ease a bit. US pending home sales (street 14.5%) are due at 10:00 am EDT.

With tomorrow being the last trading day of the month and the quarter, we may see investors repositioning their portfolios over the next couple of days. China Manufacturing PMI (street 50.1 unchanged) and China Non-Manufacturing PMI (street 52.7 vs previous 47.5) are due overnight tonight.   

Overnight corporate news has been somewhat disappointing and has raised some questions about corporate growth momentum. Memory chip producer Micron posted strong earnings per share ($2.42 vs street $2.33), but its shares are down 3.6% in premarket trading as investors focused more on management’s guidance for slowing lower shipments in the coming quarter and expectations for price growth to slow.

Meanwhile paint producer Sherwin-Williams is down 2.0% premarket today after management put out a profit warning overnight. The company cut its 2021 full year EPS forecast to $8.35-$8.45 from $9.45; the street had been expecting $9.26. Management blamed higher costs, problems getting raw materials and extended hurricane related supply chain disruptions for its reduced outlook.

Subscribe to the Morning Minutes:

Today's earnings reports and market activity, delivered right to your inbox.

Colin Cieszynski, Chief Market Strategist

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

Read More

Legal and Regulatory Disclosures

Terms and Conditions:
This information is for Investment Advisors only. The website is for informational purposes only and is not intended to provide a complete description of SIA Wealth Management’s products or services. Past performance is not indicative of future results. It should not be construed as investment advice or relied upon in making an investment decision. Products and services of SIA Wealth Management are only offered in jurisdictions where they may be lawfully offered for sale. The information contained in this Website does not constitute an offer or solicitation by anyone to buy or sell any investment fund or other product, service or information to anyone in any jurisdiction in which an offer or solicitation is not authorized or cannot be legally made or to any person to whom it is unlawful to make an offer of solicitation. All products and services are subject to the terms of each and every applicable agreement. It is important to note that not all products, services and information are available in all jurisdictions outside Canada.

SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, Advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIA Wealth Management Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.