Morning Minutes

US Retail Sales, Railroad Merger and Earnings In The Spotlight




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).  

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Colin Cieszynski, Chief Market Strategist

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

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