Morning Minutes

US Inflation and Earnings in Focus



US index futures are popping this morning following the release of US consumer price inflation numbers. Although the numbers shows pressures continuing to build, particularly headline number rising to its highest level in nearly 40 years (6.8% in line vs previous 6.2%). Core inflation, however, remained below 5.0% indicating that at least some of the inflation is commodity price driven (4.9% in line vs street 4.6%). Signs that Congress may be able to raise the US debt ceiling by the December 15th deadline also appear encouraging.

Currently, the three main US index futures contracts are up 0.6% to 0.9% with NASDAQ futures leading the charge. It remains to be seen if this is another relief rally or a sustainable bounce back from yesterday’s declines of 0.7% for the S&P 500 and 1.7% for the NASDAQ. Overseas, the FTSE and Dax are flat, while the Nikkei and the Hang Seng were both down about 1.0%.

So far traders have ignored the US 10-year treasury note yield creeping back up above 1.50% but that could influence sentiment as the day progresses. Commodities are rising today with WTI crude oil up 1.3% and copper up 0.2%. currencies are mostly quiet. Bitcoin is trying to rebound with a 4.8% gain, but remains below $50,000.

Overnight earnings were a mixed bag but generally positive. Oracle has soared 13.8% in premarket trading as strong growth in cloud infrastructure equipment boosted earnings above expectations ($1.21 vs street $1.11). Retailers lululemon ($1.62 vs street $1.41) and Costco ($2.98 vs street $2.64) both beat expectations with Costco upbeat and lululemon cautious about supply chain issues and the potential impact of the Omicron variant.  

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Colin Cieszynski, Chief Market Strategist

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

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