US index futures are down 0.1%-0.3% this morning giving back some of yesterday’s US index gains, after today’s employment and inflation reports weakened the case for Fed rate cuts any time soon. The US 10-year treasury note yield has climbed from near 4.10% toward 4.25% on the news, boosting the US Dollar and knocking Gold down 0.7% in the last few minutes.
US nonfarm payrolls came in better than expected (199K vs street 180K vs previous 150K). Average hourly earnings were steady over a year ago (4.0% in line and unchanged), but over a month ago earnings increased more than expected (0.4% vs street 0.3% and previous 0.2%), indicating that not only are wage inflation pressures not going away, they may be worsening.
Overseas, Asia Pacific markets were mixed with Tokyo down 1.7%, Seoul up 1.0% and Hong Kong flat. Major European bourses are green across the board with the Dax and FTSE both up about 0.2%. In commodity trading, Crude Oil is up 2.0% and Copper is up 0.7% in what may either be a delayed reaction to yesterday’s China trade data, or short covering ahead of the weekend.
Earnings reports last night from Broadcom* ($11.06 vs street $10.96) and Lululemon ($2.53 vs street $2.28) announced yesterday afternoon both exceeded expectations. Lululemon, however, is down 2.5% in premarket trading after the athletic clothing retailer lowered the high end of its sales guidance range even after noting it did really well on Black Friday.
*Shares of Broadcom are held in some portfolios managed by SIA Wealth Management.
SIA Wealth In The Media:
Chief Market Strategist Colin Cieszynski appeared on BNN Bloomberg recently where he spoke about relative strength, rules-based investing, SIA Wealth Management’s tactical return to 100% equity exposure, stocks, Oil, the Bank of Canada and more.
Capital has rotated down into small cap stocks and into broader range of sectors: portfolio manager