Overseas markets have been trading higher overnight following through on yesterday’s rebound in the Dow and responding positively to better than expected China trade and Australia employment numbers. Heading toward the US open, the Dow has stalled and the bigger question facing traders is whether the NASDAQ is going to rebound or sink further?
Overnight, Tesla Motors beat the street on sales and earnings yet still found itself trading sharply lower on concerns about the company’s guidance and longer-term prospects and apparently is down about 10% in pre-market trading today. This indicates that traders remain wary about high value momentum plays which may continue to retrench in the coming weeks, particularly as we move into a seasonally weaker period for stocks. Twitter’s ability or inability to hold the $30.00 level may also send a signal about traders current attitudes toward former high flyers.
Currency markets have been active overnight and into this morning on a number of significant developments.
NZD remains under pressure as traders respond to RBNZ Governor Wheeler’s threat to intervene in currency markets again should the dollar rise to far. On the other hand, AUD has rebounded on the positive Australian jobs report.
NOK is leading the field today after the Norges Bank maintained interest rates, and Governor Olsen indicated no change to his outlook. Stronger than expected industrial production numbers may also be lifting spirits. SEK is also gaining on USD but at a more moderate pace.
EUR is climbing today against USD while GBP is holding steady. Both central banks stayed the course on monetary policy
but while the Bank of England had been expected to do nothing, there had been some speculation the ECB may bring in or discuss the potential for QE stimulus which is now being unwound.
CAD continues to attract support with USDCAD holding under $1.0900 on very strong Canadian housing starts which indicate that as in the US, the Canadian economy is accelerating dramatically coming out of a difficult winter. We also could see positioning today ahead of tomorrow’s Canada employment report.
Even with Russia holding military exercises today, market concerns over the situation in Ukraine continue to ease with gold and wheat both trading moderately lower today. The situation could, however, change at any time.
With most of the news of the day now out except for a number of speeches from FOMC members including more testimony from Fed Chair Yellen, technology related stocks may continue to dominate the spotlight. Canadian markets could also see significant action with a number of big earnings reports out today and a big deal in the consumer finance sector.
Tesla Motors $0.12 vs street $0.07, sales $713M vs street $704M, forecast Q2 deliveries of 7,500 cars up from Q1 6,450, production to rise to 8,500-9,000 cars in Q2 up from 7,500 in Q1 maintained full year target of 35,000 deliveries. Earnings forecast of marginal profit short of street $0.27
Canadian Tire $0.88 vs street $0.93, raised dividend 14 3%
Bank of Nova Scotia has agreed to acquire a 20% interest in Canadian Tire’s financial service (credit card) business for $500 million in cash
SNC Lavalin $0.62 vs street $0.46, raised FY guidance to $2.80-$3.05 from $2.25-$2.50
Magna International $1.76 vs street $1.98, raised FY sales guidance to $34.9-$36.6B from $33.8-$35.5B
Telus $0.62 vs street $0.60, raised dividend 5.6%
Economic reports released overnight and this morning include:
Canada housing starts 194K vs street 175K and previous 156K
US jobless claims street 325K
Norway interest rate decision 1.50% no change as expected
UK interest rate and QE 0.50% and £375B no change as expected
ECB interest rate 0.25% no change and no QE as expected
UK Halifax house prices 8.5% vs street 9.1%
Germany industrial production 3.0% vs street 4.4%
Spain industrial output 0.6% vs street 1.6%
Norway industrial production 7.1% vs previous 5.2%
Norway industrial manufacturing 3.7% vs previous 2.1%
Greece unemployment rate 26.5% vs street 26.6%
Australia jobs change 14K vs street 8K
Australia full-time jobs 14K vs previous (22K)
Australia part-time jobs 0K vs previous 18K
Australia unemployment rate 5.8% vs street 5.9%
China trade balance $18.6B vs street $16.7B
China exports 0.9% vs street (3.0%)
China imports 0.8% vs street (2.1%)
NZ house prices 8.4% vs previous 8.8%
Economic reports due later today include:
9:30 am EDT FOMC Chair Yellen gives more testimony to Congress, four additional FOMC members speak through the day
10:30 am EDT US natural gas street 70 BCF