Dow tests 20,000 as stocks rally with earnings, Mexico and oil in focus
Stock markets continue to turn back upward as capital returns to risk markets and traders respond favourably to earnings reports. US index futures are up 0.3% with the technology and momentum stock heavy NASDAQ leading the charge and hitting new highs. The Dow is back above 19,900 with 20,000 in view again. Overseas, the FTSE is up 0.3% while the Dax is up 1.3% and the NIKKEI gained 1.4%.
Industrial and infrastructure stocks may attract a lot of attention. Building on yesterday's orders to accelerate pipeline and infrastructure project approvals, today President Trump is expected to tackle immigration including the building of a wall on the Mexican border. Also, a number of big earnings reports are due with Boeing, Textron and others reporting today with Caterpillar reporting tomorrow.
In currency markets, the Mexican Peso may be active with the country in the crosshairs of potential US actions related to immigration. Sterling continues to climb amid reports the government is planning a quick path to passing the Brexit bill and moving up its goal of triggering Article 50 to mid-March from end-March. Gold is still soft with capital leaving defensive havens. JPY shrugged that off gaining on strong exports.
Crude oil may also be active today with a focus on the US market. WTI is down 1.0% this morning after API reported a 2.2 mmbbl inventory build for last week. In addition to today's DOE inventory reports, the potential for higher supply from expedited approval of the stalled Keystone XL and Dakota Access pipeline projects plus increased exploration and investment in US shale could impact supply demand speculation.
Boeing $2.47 vs street $2.34
Canadian National $1.23 vs street $1.21
Texas Instruments $0.88 vs street $0.81, guides Next Q to $0.78-$0.88 above street $0.75
Japan trade balance ¥641B vs street ¥250B
Japan exports 5.4% vs street 1.2%
Japan imports (2.6%) vs street (0.8%)
Australia consumer prices 1.5% vs street 1.6%
Germany IFO current 116.9 vs street 117.0
Germany IFO bus climate 109.8 vs street 111.2
Germany IFO expectations 103.2 vs street 105.8
Upcoming significant economic announcements include:
10:30 am EST US DOE crude oil inventories previous 2.3M
10:30 am EST US DOE gasoline inventories previous 5.9M