Morning Minutes

US Dollar Rebound Sends Stocks Sinking




US index futures are down 0.9% to 1.3% adding to yesterday’s US index losses of 0.9% for the S&P and 1.5% for the NASDAQ, as investors continue to work through the tail end of earnings season and deal with a jump in the US 10-year treasury note yield toward 3.90% after St. Louis Fed President Bullard suggested the US central bank’s monetary tightening to date has only had a limited impact toward curtailing inflation which investors seem to be reading as hawkish. The US Dollar is also bouncing back this morning pushing Gold down 0.9% and Silver down 2.6%.

Overseas, the FTSE is down 0.5% with the UK government tabling a new budget, while the Dax is down 0.2% and the CAC is down 0.8%. Amid ongoing economic and political uncertainty overseas, commodities are under pressure again with WTI Crude Oil down 1.6% and Copper down 1.8%.

Overnight earnings reports out of the US were very mixed overnight and into this morning. Macy’s beat the street on earnings ($0.52 vs street $0.19, up 5.6% premarket), maintained its Q4 sales forecast, and raised its full year EPS guidance. Bath and Body Works is up 19.8% premarket after doubling street expectations on earnings ($0.40 vs street $0.20). On the other hand, Kohls is down 4.0% premarket after pulling forward guidance blaming economic headwinds. On the technology side, results were missed as Nvidia fell short of expectations ($0.58 vs street $0.71), and Cisco Systems beat analyst estimates ($0.86 vs street $0.84). After the close today, results are due from Gap Stores

Today’s US economic news has been mixed. Housing starts (1,425M vs street 1.41M) were slightly better than expected, weekly initial jobless claims were slightly worse than expected (222K vs street 225K), and the Philadelphia Fed Manufacturing Survey was significantly worse than expected (-19.4 vs street -6.2 and previous -8.7). Tomorrow brings US existing home sales and UK retail sales.  

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Colin Cieszynski, Chief Market Strategist

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

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