After a day that saw big swings
in both directions, US indices finished off yesterday moderately higher with the Dow and S&P trading near the high end of their current trading channels and all-time highs.
Many markets around the world have been closed overnight for Labour Day holidays. Disappointing manufacturing PMI for Australia knocked the S&P/ASX down, on the other hand strong manufacturing PMI for the UK has boosted the FTSE.
Chinese PMI was mixed, improving slightly over last month but not as much as the street had hoped. Copper has been holding $3.00 after a selloff earlier in the week while crude oil continues to weaken.
WTI crude is trading under $100.00 once again.
Earnings reports from oil and gas producers have been mixed today. US majors have posted stellar reports boosted by refining operations as gasoline outperformed WTI in the quarter and on into the spring. Canadian producers, on the other hand have disappointed.
Gold and silver, along with JPY are under pressure again today as capital continues to move away from defensive havens. Soft commodity prices have reduced the demand for precious metals as an inflation hedge, while the political situation in Ukraine remains tense but so far contained.
There are two more news events this week that have the potential to drive US markets to all-time highs this week. Today’s US manufacturing PMI reports between 9:45 and 10:00 am ET, and tomorrow’s nonfarm payrolls report at 8:30 am ET. If results are good, markets may be able to rally but if they are unable to captialize on strong reports, it would suggest that indices are exhausted and vulnerable to a correction. As we saw yesterday, both bulls and bears are looking to numbers for a reason to act, which could create significant trading opportunities right through the rest of the week.
Imperial Oil $1.09 vs street $1.17
Canadian Oil Sands $0.42 vs street $0.58, cut 2014 production forecast to 274,000 bbl/d raised sales guidance to $3.52B on higher prices
Penn West ($0.12) vs street $0.11
Baytex Energy $0.38 vs street $0.52
Bombardier $0.08 as expected
Manulife $0.37 as expected
Goldcorp $0.11 vs street $0.14
ExxonMobil $2.10 vs street $1.88
ConocoPhillips $1.81 vs street $1.56
Tesoro $0.71 vs street $0.38
MasterCard $0.73 vs street $0.72
MetLife $1.37 vs street $1.40
Western Digital $1.94 vs street $1.89
Cigna $1.83 vs street $1.54, raised FY guidance to $7.05-$7.35 from $6.80-$7.20
Economic reports released overnight and this morning include:
US Challenger layoffs
US jobless claims 344K vs street 320K
US personal income 0.5% vs street 0.4%
US personal spending 0.9% vs street 0.6%
US core PCE inflation 1.2% as expected
UK house prices 10.9% vs street 9.8%
UK mortgage approvals 67K vs street 72K
Australia house prices 0.3% vs previous 2.3%
Australia commodity prices (12.6%) vs previous (12.8%)
Japan vehicle sales (11.4%) vs previous 14.5%
Manufacturing PMI reports
Australia 44.8 vs previous 47.9
China official 50.4 vs street 50.5 and previous 50.3
UK 57.3 vs street 55.4
Economic reports due later today include:
Manufacturing PMI reports
9:30 am EDT Canada previous 53.3
9:45 am EDT US Markit street 55.4
10:00 am EDT US ISM street 54.3 vs previous 53.7
8:30 am EDT US Fed Chair Yellen speaking
10:00 am EDT US construction spending street 0.5%
10:30 am EDT US natural gas street 77 BCF