US investors appear to be returning from their long weekend and starting June in a good mood. Dow futures are up nearly 250 points or 0.7% this morning while NASDAQ futures are up 0.4%. North America also appears to be picking on positive momentum from overseas where the Dax is up 1.7%, the FTSE is up 1.2% and the Hang Seng rose 1.0%.
Investors appear to be responding positively to a series of positive manufacturing PMI reports from around the world overnight including: Japan (53.0 vs street 52.5), Germany (64.4 vs street 64.0), Spain (59.4 vs previous 57.7), and Italy 62.3 vs previous 60.7). Canadian manufacturing PMI is due at 9:30 am EDT (street 57.9) followed by the US ISM manufacturing PMI report at 10:00 am EDT. For the US in addition to the headline number (street 60.7 unchanged), investors may also look to the forward-looking new orders component (street 66.3 vs previous 64.3) and the prices paid inflation reading (street 86.8 vs previous 89.6). US construction spending is also due at 10:00 am EDT (street 0.6% vs previous 0.2%).
Signs of an emerging global recovery which could further boost resource demand appear to be at the top of the agenda at today’s OPEC+ meeting. While the cartel and its allies have already announced plans to increase production quotas by 2.1 mmbbl/d by the end of July, investors may look to the communique or other comments for hints on whether additional increases are being considered for the summer.
Coming off the start of summer driving season in North America, crude oil contracts are climbing this morning with WTI rallying 3.4% toward $68.50, while Brent Crude has jumped 2.5% and regained $70.00/bbl. Investors may recall that WTI last peaked in late 2018 near $77.50/bbl. At that time, President Trump released supply from the Strategic Petroleum Reserve to keep a lid on prices, it remains to be seen if President Biden or OPEC+ are prepared to increase supply at this point or not.
This morning brings news of a merger in the Canadian oil patch, with Pembina Pipeline agreeing to purchase Inter Pipeline for $19.45 per share, or $8.3B, in a friendly agreement, trumping a previous $16.50 per share hostile bid from Brookfield Infrastructure Partners. Meanwhile, a strong earnings season for Canadian Bank earnings finished on a positive note with the Bank of Nova Scotia beating expectations ($1.90 vs street $1.76), and reducing its loan loss provisions ($496M vs previous $764M).
SIA Wealth In The Media
Chief Market Strategist Colin Cieszynski will be appearing on BNN Bloomberg at 9:30 am EDT this morning.