Morning Minutes

US Earnings Reports Remain Mostly Positive




US index futures are up marginally this morning as indices consolidate yesterday’s 0.8% to 0.9% gains for the big three US indices and a 1.8% gain for the Russell 2000. Overseas, the Dax is up 0.9% while the FTSE is flat. Commodities are up this morning with WTI crude oil gaining 0.6% and copper climbing 1.0%. A 0.5% decline for gold and the US 10-year treasury note yield holding above 1.25% suggests that capital has stopped flowing into defensive havens.

US earnings are in focus again this morning. Confirming recent weakness in the Dow Transports, two of America’s largest airlines reported mixed results this morning: Southwest missed expectations on earnings but beat on revenues (loss per share -$0.35 vs street -$0.23, sales $4.01B vs street $3.93B), while American beat the street on earnings and sales (loss per share -$1.69 vs street -$2.03, sales  $7.48B vs street $7.32B).

Results from companies in other sectors were more uniformly above expectations including AT&T ($0.89 vs street $0.79), Whirlpool ($6.64 vs street $5.90), and Texas Instruments ($2.05 vs street $1.83).

This afternoon brings results from Intel, Union Pacific and Twitter, with Americah Express, Air Canada and Schlumberger headlining tomorrow morning’s results.

US weekly initial jobless claims were worse than expected (419K vs street 350K and previous 368K). US existing home sales are due at 10:00 am EDT (street 5.9M). Tomorrow morning brings flash PMI reports from around the world.

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Colin Cieszynski, Chief Market Strategist

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

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