Morning Minutes

Stocks Struggle With Stubborn Inflation

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World markets continue to struggle with reports that suggest inflation is not falling as fast as hoped in countries outside of the US. So far this week, Canadian Consumer Prices (4.3% vs street 4.2% and previous 4.7%), UK Consumer Prices (10.1% vs street 9.8% and previous 10.4%), and UK Average Earnings (6.6% vs street 6.2%). Canadian Industrial Prices (0.1% vs street 1.6%) and Canadian Housing Starts (214K vs street 238K) have come in below expectations.

The US 10-year note yield continues to climb on this news and it has moved back up above 3.60% this morning, up from a low near 3.25% earlier this month. The US Dollar is rising on this news, gaining 0.3% against the Euro and 0.4% against the Canadian Dollar. Meanwhile, Gold has dropped 1.9% and Bitcoin is down 3.1%, falling back under $30,000. US Dollar headwinds are also dragging on commodities with WTI Crude Oil falling 2.1% to slide back under $80.00/bbl, while Copper is down 1.5% sitting just above $4.00/lb. US index futures are down 0.4% to 0.8% this morning. Overseas, the Dax and FTSE are both down 0.2%, while the Hang Seng fell 1.3% overnight.

Netflix is down 1.6% in premarket trading following a mixed report where EPS beat expectations ($2.88 vs street $2.86), but subscriber growth disappointed (1.75M vs street 2.41M). United Airlines posted a smaller than expected loss (-$0.63 vs street -$0.73). Morgan Stanley ($1.70 vs street $1.62) beat the street, boosted by results from Trading and Wealth Management. Results are due later today from Tesla Motors, IBM, Lam Research and Las Vegas Sands. Headliners tomorrow morning include American Express, Union Pacific, Nucor, DR Horton and others.

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Colin Cieszynski, Chief Market Strategist

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

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