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US Retail Sales, Railroad Merger and Earnings In The Spotlight

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Building on yesterday’s bounce back in the US which saw the Dow Industrials gain 1.3% and the NASDAQ climb 0.7%, overseas markets have been on the rise overnight. In Asia Pacific trading, Tokyo jumped 2.3% after being hammered earlier in the week, while Hong Kong rose 1.1%, while the resource-cushioned Sydney market posted a more moderate 0.4% gain. In Europe today, the Dax and the FTSE are both up 0.7%.

With the US 10-year treasury note yield stabilizing in the low 1.60s% area, US index futures are up again this morning with gains varying between 0.50% for Dow Futures and 1.1% for NASDAQ futures. Commodities are mixed today with WTI crude oil up 1.1% but copper down 0.6%. Sentiment has been helped this morning by yesterday’s announcement from the Centers for Disease Control setting the stage for fully vaccinated people to start going maskless indoors in some circumstances, and also the news that the Colonial Pipeline is getting back up and running, easing gasoline supply disruptions.

In Canada today, the big news is that Kansas City Southern has walked away from its previously announced merger deal with Canadian Pacific, and pay a $700M break few, in order to accept the rival $33.6B bid from Canadian National Railway to create the first railroad company to link all three USMCA partner countries in its network.

US retail sales were disappointing, coming in flat for April, well short of the 1.0% increase the street had expected. Excluding autos, retail sales fell 0.8%, sort of the 0.7% gain the street had expected.

A number of notable companies have reported earnings overnight headlined by Walt Disney who beat the street on EPS ($0.79 vs street $0.27) but fell short of expectations on Disney+ streaming subscribers (103.6M vs street 109.0M). Several recently listed companies reported positive numbers including AirBnB (sales $887M vs street $714M), cryptocurrency exchange Coinbase (sales $1.80B vs previous quarter 0.58B), and food delivery service DoorDash (sales $1.08B vs street $0.99B). On the other hand, Canada’s Aurora Cannabis posted disappointing sales numbers ($55.1M vs street $68.8M and down 25% from a year ago as recreational sales plunged 53% over year).  

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

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At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

Colin Cieszynski, Chief Market Strategist
Market Commentary:

Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

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