Morning Minutes

World Markets Pause As Investors Await New Developments




Coming off a busy Friday which saw the NASDAQ drop 1.25% while Crude Oil and Gold soared, world markets are quiet so far today with investors digesting recent trading action on a quiet day for business news. US index futures are trading flat to up 0.4%, while over in Europe, the Dax is flat and the FTSE is up 0.4%. Crude Oil contracts are consolidating Friday’s rallies with WTI holding $87.50 and Brent holding above $90.00. In metals action, Copper is up 0.5%, while Gold is holding well above the $1,900 level it regained on Friday.

While Friday’s earnings news was generally positive, what little business news there has been today has been more concerning, particularly in health-related areas. After plunging 16.3% on Friday, US drug store chain Rite-Aid filed for bankruptcy protection over the weekend, blaming a combination of growing debt levels/costs and falling sales. Late Friday, Pfizer put out a profit warning, cutting earnings estimates which management blamed on lower than expected demand for COVID related vaccines and treatments.

Earnings season picks up again tomorrow, with many senior US companies scheduled to reports results through the end of the month. This week’s headliners include: Bank of America and Goldman Sachs tomorrow, Tesla Motors*, Travelers, Procter & Gamble, Morgan Stanley, and Netflix Wednesday, railroads on Thursday and American Express on Friday plus US regional banks throughout the week.

The US Empire State Manufacturing Survey (-4.6 vs street -7.0 and previous +1.9) did not drop off as badly as feared.  The rest of the week is active for economic news as well. Tomorrow brings US retail sales, plus Canada housing starts and consumer prices. Wednesday features China GDP and retail sales, plus UK consumer prices and US housing starts. Six FOMC members are speaking on Thursday, headlined by Chair Powell. Friday finishes off a big week with Canada and UK retail sales.

*Shares of Tesla Motors are held in portfolios managed by SIA Wealth Management.

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Colin Cieszynski, Chief Market Strategist

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

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