Commentary: Stocks retreat on a busy day for earnings reports
Stocks retreat on a busy day for earnings reports
By Colin Cieszynski Senior Market Analyst, CMC Markets
Indices around the world have been dropping back their downtrend today suggesting that the strength of recent sessions was more of a technical rebound possibly driven by retirement account inflows ahead of tax deadlines than renewed enthusiasm about stocks. The slide that started in the US yesterday afternoon has been accelerating and appears set to overhang today’s North American trading.
Overnight news once again highlights how much poor weather this year has impacted data. While Canada and the US were able to recover jobs in January, Australia was not, indicating that it’s economy has been affected by more than just big storms. Today’s US retail sales coming in below expectations also appears to have likely been affected by bad weather, and February numbers could also be impacted.
This week, much of the US south has been affected by another big storm that has shut down US government offices in Washington DC, postponing Fed Chair Yellen’s second round of testimony to Congress. It’s important for Canadians to remember that while we are prepared for big winter storms and bounce back quickly, they just don’t have the equipment to deal with snow and ice in the south and it looks like this week’s storm may leave many cities shut down completely for several days.
In currency markets overnight the two biggest moves have been in opposite directions with GBP continuing to climb on the back of yesterday’s GDP guidance increase from the Bank of England. AUD, on the other hand has been slammed following the release of another weak Aussie jobs report suggesting that the RBA may have to keep the door open to a potential rate cut after all. Defensive plays like JPY and CHF have also picked up today.
Today is also a huge day for corporate news. A big merger in the cable sector plus a flurry of earnings reports may capture attention stateside. In Canada, it’s the biggest day of the quarter for earnings with a number of seniors across many sectors putting numbers out ahead of the long weekend. Gold producers have missed badly for the most part as the sector struggled to adjust to a lower price environment. Insurers were mixed but Canadian Tire, Cenovus and Precision Drilling all managed to beat the street.
Comcast has agreed to purchase Time Warner Cable in a $45B deal.
Cisco Systems $0.47 vs street $0.46, raised dividend 11.8%
Nvidia $0.25 vs street $0.18
NetApp $0.75 vs street $0.71
Applied Materials $0.23 vs street $0.22
Apache $1.57 vs street $1.80
PepsiCo $1.05 vs street $1.00
Whole Foods $0.42 vs street $0.44 cuts FY guidance to $1.58-$1.65 from $1.65-$1.68
MetLife $1.37 vs street $1.30
Sun Life $1.05 ex items vs street $0.69
ManuLife core EPS $0.35 vs street $0.38
Bombardier $0.07 vs street $0.10, revenue $5.3B vs street $4.8B
Canadian Tire $2.32 vs street $2.26
EnCana $0.31 vs street $0.33
Cenovus Energy cash flow $1.10 vs street $1.01
Precision Drilling $0.24 vs street $0.16
Teck Resources $0.40 vs street $0.43
Barrick Gold $0.37 vs street $0.38
Agnico-Eagle $0.25 vs street $0.20
Goldcorp $0.09 vs street $0.24
Kinross Gold ($0.02) vs street $0.03
Telus $0.47 as expected
Economic reports released overnight and this morning include:
US retail sales (0.4%) vs street 0.0%
US jobless claims 339K vs street 330K
Brazil retail sales 4.0% vs street 5.0%
Canada new house prices vs street 1.3%
Australia employment change (3K) vs street 15K vs previous (22K)
Australia unemployment rate 6.0% vs street 5.9%
Australia full-time jobs (7K) vs previous (31K)
Australia part-time jobs 3K vs previous 9K
South Korea interest rate 2.50% no change as expected
NZ Business PMI 56.2 vs previous 56.4
Greece unemployment rate 28.0% vs previous 27.7%
Germany consumer prices 1.3% as expected
Sweden interest rate 0.75% no change expected
Economic reports due later today include:
10:30 am EST US natural gas street 230 BCF