Morning Minutes

Stocks Try To Build on Positive Economic and Earnings News




Although gains of 1.9% for the S&P 500 and 3.4% for the NASDAQ were not enough to keep the US from recording its worst month since March of 2020, positive momentum has continued through overnight trading. Holiday-limited Asia Pacific trading saw Sydney gain 0.5% and Tokyo climb 0.3%. February is off to a strong start in Europe with the Dax up 1.25% and the FTSE up 1.0%. US index futures are trading between flat and up 0.2% as markets digest yesterday’s gains.

Investors have generally responded favorably to overnight economic news. The Reserve Bank of Australia announced it is ending asset purchases next week but also that it has no plans to start raising interest rates. Building on yesterday’s positive Chicago PMI report (65.2 vs street 61.7), Manufacturing PMI reports from Japan, the UK and elsewhere have been coming in above expectations. Canadian Manufacturing PMI (street 56.9) is due at 9:30 am, followed by US construction spending (street 0.6%), and US ISM Manufacturing PMI (street 61.0 vs previous 60.4) at 10:00 am. Investors may also take interest in the ISM Prices Paid (street 68.1) and new orders (street 61.0) components.

Earnings season resumes today with several positive results headlined by UPS ($3.59 vs street $3.10, 49% dividend increase, up 8.2% premarket), and Exxon Mobil ($2.05 vs street $1.93). AMC Theaters are up 10.6% premarket following a positive preannouncement, while AT&T is down 6.2% premarket after announcing that it plans to spin off its Warner Media business following its planned merger with Discovery Communications later this year.

Weather continues to influence trading in natural gas which is down 4.3% as temperatures warm in consuming regions. WTI crude oil is down 0.6% trading near $87.50 ahead of tomorrow’s OPEC+ meeting. Copper is bouncing back with a 2.4% overnight gain.

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Colin Cieszynski, Chief Market Strategist

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

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