US retreat resumes on a crazy day for Canada
01:00, 22 oktober 2014
· Av CMC Markets
After three days, the relief rally in North America ended over the course of the day. Canadian stocks started the day off on the back foot in the wake of disappointing retail sales, then took a second sharp leg downward after news of attacks in and near Canada’s Parliament buildings circulated.
US markets tried to stay above water through the morning but gave up about lunchtime and fell through the afternoon, suggesting that the recent relief rally has become exhausted and another retrenchment starting.
Individual stock action was mixed. Boeing was unable to capitalize on a guidance increase but trader’s cheered Yahoo!’s earnings sparking a rally back above $40.00. Apple tested its all-time high near $104.00 but was unable to meaningfully break through and slumped back into the close.
It was also a busy day for action in commodity and currency markets. CAD was all over the place starting out with a big selloff on the retail sales numbers then clawing it all back and more after the Bank of Canada held interest rates and maintained a positive outlook for the Canadian economy before seeing the rally capped by the Ottawa Shootings.
Crude oil was hit hard again today after US inventories showed another bigger than expected increase in stockpiles, indicating there’s lots of supply out there at the moment.
It’s a busy day for economic news before focus turns back to US earnings later tomorrow. Flash manufacturing PMI headlines the program with the first indication of where major exconomies are heading in October with traders likely most interested in whether China is really stabilizing, if France Germany are still getting worse and if the US has been able to keep up its momentum as one of the few truly bright spots left in the world.
In Asia Pacific news, inflation reports for New Zealand and Singapore may also attract attention.
GBP spent the day in retreat after Bank of England minutes indicated MPC members were concerned that the slowdown in Europe could drag on the UK economy. Tomorrow’s UK retail sales may indicate how justified those fears may be.
Tomorrow also looks to be another active one in the US with a number of data reports led by jobless claims and flash PMI, and a number of earnings reports including Caterpillar, 3M, GM and MicroSoft. It’s also a big day for Canadian earnings led by Potash, Rogers and Husky Energy.
Citrix Systems $0.75 vs street $0.73, guides FY EPS to $3.22 to $3.25 bringing up bottom from $3.20
Lam Research $0.96 vs street $0.93, guides next Q to $1.05 to $1.19 vs street $1.17
Visa 20% dividend increase
Open Text $0.97 vs street $0.86
Significant announcements released overnight include:
UK Bank of England meeting minutes 7-2 vote on interest rate, two hawkish dissenters, no change
US consumer prices 1.7% vs street 1.6%
US core CPI 1.7% as expected
US Crude oil inventories 7.1 mmbbls vs street 3.0 mmbbls
Canada interest rate 1.00% no change as expected
Canada retail sales (0.3%) vs street 0.0%
Canada retail sales ex autos (0.3%) vs street 0.2%
Upcoming significant announcements include:
8:45 am AEDT NZ consumer prices street 1.2% vs previous 1.6%
12:35 pm AEDT Japan flash manuf PMI street 51.7
12:45 pm AEDT China flash manuf PMI street 50.2
4:00 pm AEDT Singapore consumer prices street 0.9%
8:00 am BST France flash manuf PMI street 48.5
8:00 am BST France flash service PMI street 48.3
8:30 am BST Germany flash manuf PMI street 49.5
8:30 am BST Germany flash service PMI street 55.0
8:30 am BST Sweden unemployment rate street 7.9%
9:00 am BST Norway interest rate 1.50% no change expected
9:00 am BST Eurozone flash manuf PMI street 49.9
9:00 am BST Eurozone flash service PMI street 52.0
9:30 am BST UK retail sales street 2.9%
9:30 am BST UK retail ex auto street 3.4%
9:30 am BST UK house purchase loans street 41K
12:00 pm BST Turkey interest rate 8.25% no change expected
8:30 am EDT US jobless claims street 281K vs previous 264K
9:00 am EDT US house prices street 0.3%
9:45 am EDT US flash manuf PMI street 57.0
10:00 am EDT US leading index street 0.7%
10:30 am EDT US natural gas street 97 BCF
TBA Bank of Canada Poloz and Wilkins press conference and testimony