Morning Minutes

Stocks Try to Bounce Back Amid Signs of Stagflation




US index futures are in the green this morning with gains of 0.25% to 0.90%. With European market action mixed today (Dax is up 0.6% FTSE is down 0.2%) and with the US 10-year treasury note yield hanging around 3.95%, it is unclear whether today’s early market action is a relief rally driven by bargain hunters or if a sustainable bounce is starting.

Commodity trading is mixed today. WTI Crude Oil has bounced 1.25% but remains below $75.00/bbl, while Natural Gas is down 2.6% and Copper is down 0.6%. Oil’s rally comes despite a big 9.5 mmbbl build in weekly API US Oil inventories. US weekly DOE oil inventories are due at 11:00 am EST (street 2.0 mmbbls), preceded at 10:30 am by EIA natural gas storage (street -67 BCF), which may keep energy contracts active through the day.

Earnings reports released overnight and into this morning have been mixed. On the positive side, Nvidia ($0.88 vs street $0.81, up 10.5% premarket), exceeded expectations. On the other hand, electric vehicle producer Lucid Motors is down 13.5% premarket after sales fell well short of estimates ($257M vs street $302M).

In a new sign of stagflation, US Q4 GDP surprisingly was revised downward (2.7% vs street/previous 2.9%), while the US Q4 Product price index was revised upward (3.9% vs street/previous 3.5%). The US job market remains robust with US jobless claims coming in below 200K for the seventh week in a row.

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Colin Cieszynski, Chief Market Strategist

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

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