The relentless drive higher by stock markets has stopped for a rest overnight. US index futures are trading down 0.1%, the Dax is down 0.2% while the FTSE and Nikkei
are down 0.5%. Crude oil is steady while USD is down slightly against gold and major currencies.
There hasn't been much in the way of overnight economic news except for a better than expected Australian jobs report. Therefore the pause appears to be mainly due to technical exhaustion. It too early to tell is a top may be forming or if this is a rest stop within a bigger advance.
One thing that could give US traders pause is increasing signs the Fed could raise rates at its March meeting. Following on from FOMC Chair Yellen's testimony, regional Fed Presidents have been talking hawkishly. Last night, NY Fed President Dudley indicated he expects to see a small rate hike in the coming months if forecasts work out. Philadelphia Fed President Harker continues to look toward three hikes this year, the Fed's party line while Boston Fed President Rosengren thinks we could see even more increases than that. This morning, Fed Vice-Chair Fischer suggested 2-3 hikes possible this year. The US Dollar Index is holding just above 101.00 indicating the street expects four rate hikes this year. Expectations in Fed Funds for a March rate hike have moved up to 36% from 15% a couple of weeks ago.
It's a big day for earnings in Canada today. Results from EnCana, TransCanada and Cenovus in the energy sector have come in above expectations, indicating rising energy prices are paying off. Canadian Tire beat the street on sales and earnings with Tire same store sales up a strong 8.1%. Sun Life and Fortis also beat the street by wide margins. Bombardier disappointed again posting an even deeper loss than the market had been expecting. Gold earnings were mixed with Barrick and Goldcorp beating the street while Agnico-Eagle and Kinross fell short of expectations.
Canadian Tire $3.46 vs street $3.40, same store sales Tire 8.1%, Marks 10.6%
Sun Life $1.19 vs street $0.97
Fortis $0.64 vs street $0.51
Cenovus Energy $0.64 vs street $0.49
EnCana $0.31 vs street $0.27
TransCanada $0.75 vs street $0.72, 10% dividend increase.
Bombardier ($0.07) vs street ($0.03)
Barrick Gold $0.22 vs street $0.20, 50% dividend increase
Goldcorp $0.12 vs street $0.09
Kinross Gold ($0.04) vs street $0.01
Agnico-Eagle $0.02 vs street $0.09
Cisco Systems $0.57 vs street $0.56
NetApp $0.82 vs street $0.74, guides next Q $0.79-$0.84 above street $0.77
Australia employment change 13.5K vs street 10.0K vs previous 13.5K
Australia full-time jobs (45K) vs previous 9K
Australia part-time jobs 58K vs previous 4K
Australia unemployment rate 5.7% vs street 5.8%
France unemployment rate 10.0% vs street 9.8%
NZ ANZ consumer confidence 127.4 vs previous 128.7
Upcoming significant economic announcements include:
8:30 am EST US jobless claims street 245K vs previous 234K
8:30 am EST US housing starts street 1,226K
8:30 am EST US building permits street 1,230K
8:30 am EST US Philadelphia Fed manufacturing street 18.0 vs previous 23.6