Morning Minutes

US Stocks Climb, Oil Falls with Employment and OPEC+ In Focus




Coming back from the Easter holiday weekend, US stock markets have picked up where they left off Thursday and are continuing to climb. Building on Thursday’s all-time record high close (and the first close above 4,000) for the S&P 500, S&P futures are up another 0.5% this morning, while Dow Futures are up 0.7% and NASDAQ futures are up 0.4%

Friday’s strong US employment report has been helping to boost sentiment this morning, Nonfarm payrolls jumped by 916K in March, beating the 647K street estimate. In addition, February’s job increase was revised upward to 468K from 379K.

Perhaps even more important for investors, this good economic news has not sparked another pop in the US 10-year treasury note yield, which continues to level off in the 1.70% to 1.75% range. A positive response to these developments can also be seen in the economically sensitive copper price, which is up 2.9% so far today.

On the other hand, crude oil prices are under pressure with WTI and Brent crude both down about 2.4%. Over the weekend, OPEC+ agreed to allow production to start increasing in stages between May and July to a total of 1.1 mmbbl per day when all is said and done. Natural gas is also down, falling 3.0% today with home heading season over and spring arriving in more parts of North America.

Two US economic reports are due today at 10:00 am EDT. ISM Non-Manufacturing PMI (street 58.5 vs previous 55.3) and factory orders (street -0.5% vs previous 2.6%. It’s a quiet day for corporate news, with the only announcement of note being word that GameStop is planning to raise money through a stock offering which has its shares down 12.2% premarket.

Its expected to be a quiet week for scheduled earnings news but we are in confession season when we may see preannouncements from companies who have done substantially worse, or occasionally better, than previous guidance or investor expectations.  The economic calendar is dominated by Service PMI reports in the early part of the week, then some trade and some inflation numbers later in the week.

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Colin Cieszynski, Chief Market Strategist

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

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