Morning Minutes

Stocks Struggle With Expectations; Commodities Rebound




US earnings season has been off to a strong start but that may be changing this morning with NASDAQ futures down 0.6% and Dow Futures up 0.1%. Up to this point, the earnings calendar had been dominated by the Financials sector where expectations had been relatively lower with the sector still recovering from its winter selloff.

Overnight, results have started to come in from stocks in other sectors which have posted relatively stronger year to date gains and had built in higher expectations, and it appears that in some cases we may be seeing a “Buy on Rumor, Sell on News” situation emerging. Despite significantly beating street expectations both Netflix* ($3.29 vs street $2.85, down 5.3% premarket) and Tesla* ($0.91 vs street $0.80, down 4.0% premarket) have retreated in overnight trading action.

Meanwhile IBM ($2.18 vs street $2.01), Johnson & Johnson ($2.80 vs street $2.62) and Activision Blizzard ($1.08 vs street $0.88) are all flat after reporting strong results, suggesting that in other cases investors may not be looking to sell against news but also don’t seem to be interested in stepping up to add to positions either. After the close today, results are due from railroad CSX and credit card provider Capital One.

Commodities appear to be getting a boost this morning from two positive Asia Pacific developments overnight. The Peoples’ Bank of China held its benchmark interest rate at 3.55%, and Australia, a big supplier of commodities to China reported strong employment (33K vs street 15K). This morning finds China-sensitive Copper up 1.7%, Natural Gas up 2.8% and WTI Crude Oil up 0.3% and trading above $75.00/bbl.

US jobless claims were better than expected this week (228K vs street 242K). US existing home sales are due at 10:00 am EDT (street 4.2M).

*Shares of Netflix and Tesla are held in portfolios managed by SIA Wealth Management.

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.