After defying gravity last week, Crude oil continues to fall back to Earth this morning with WTI and Brent both falling 1.1%. Oil's tumble appear to be mainly due to a lack of new reasons to keep the party going, combined with a seasonally quieter period for trading.‎ The crude correction could act as an anchor on energy stocks as well.

Canadian banks could dominate the spotlight ‎with earnings season kicking off on a positive note as Bank of Montreal reported adjusted EPS of $1.94 way above the $1.81 street estimate. Growth was driven by US personal and commercial banking which was up nearly 25% over year, and by Capital Markets. Canadian personal and commercial banking earnings only rose by 1% due to an increase in credit loss provisions which rose to $257M from $160M in the same quarter last year. This suggests the Alberta Wildfires, plus the struggling oil patch and exposure to hot and cold real estate markets in different parts of the country could impact results from other Canadian banks as well depending on where their business is focused.

‎Overall, world markets continue to trend sideways with traders waiting on Fed Chair Yellen's speech to give more clues on whether the Fed is looking to raise interest rates in September or December. US index futures are up 0.25% after finishing flat on Monday. The Dax is up 0.8% and the FTSE is up 0.4%. Flash manufacturing and service reports for France and Germany were mixed, but traders appear to be responding favourably to comments out of yesterday's summit of German, Italian and French leaders indicating the EU plans to go on after Britain leaves, easing fears Brexit could lead to more turmoil on the continent.


Corporate News

Bank of Montreal    $1.94 vs street $1.71, US P&C earnings up 24%, provision for credit losses $257M vs year ago $160M

Best Buy    $0.57 vs street $0.43, same store sales 0.8% vs street (0.4%)


Economic News

Japan flash manufacturing PMI        49.6 vs previous 49.3

France flash manufacturing PMI        48.5 vs street 48.8
France flash service PMI        52.0 vs street 50.5
Germany flash manufacturing PMI    53.6 as expected
Germany flash service PMI        53.3 vs street 54.4

UK CBI total orders            (5) vs street (10)


Upcoming significant economic announcements include:

9:45 am EDT        US flash manufacturing PMI        street 52.6
10:00 am EDT        US Richmond Fed            street 6 vs previous 10
10:00 am EDT        US new home sales             street 580K