Stocks have continued their rebound overnight with the Dow regaining 22,000. Currencies have consolidated while key commodities have been flat to positive, heading into another potentially big day for trading news.
The main event of the day is the start of NAFTA renegotiations between the US,. Canada and Mexico. Canada outlined its goals earlier this week. Statements from US officials on their goals could impact trading in CAD and MXN, particularly is we get any inflammatory tweets or not from President Trump.
Crude oil is up 0.3% today regaining support from another big drawdown (9.1 mmbbls) in API crude oil inventories. Oil may remain active through today’s weekly DOE reports with traders looking for a smaller 3.5 mmbbl drawdown.
Copper has jumped 1.5% today and gold has stabilized. Steady to improving commodity prices boosted Australia to a 0.5% gain overnight and could help Canada's market today. Some sectors could be impacted by NAFTA, however, as we saw with forest products which sold off earlier in the week as softwood lumber could become a point of contention in negotiations.
Retail stocks in the US sold off with declines varying from 2-3% for home Depot and Lowes to 20%+ for Dicks Sporting Goods and Advance Auto Parts. Today Target beat the street on earnings and guidance so we'll see idf the street is willing to respond favourably to good news or inclined to take profits against it. Heavyweight Wal-Mart reports tomorrow. This morning President Trump complained in a Tweet of the Amazon impact on US retailers and retail jobs. It remains to be seen what he can do, if anything, and what that could mean for sentiment toward the sector.
FOMC minutes are due later in the day. Traders may try to find hints about September but likely won't get much. It's still unlikely the Fed will do anything in September due to political reasons (debt ceiling, budget battle, potential government shutdown). We're more likely to get an idea of what the Fed is thinking at their Jackson Hole conference later this month.
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