The trading week is off to a positive start for equities. US index futures are up 0.3%-0.6%, In Europe today, the Dax is up 0.2%, the FTSE is up 0.6%, but the CAC is down 0.5% with the Olympics underway in Paris. Asia Pacific trading saw gains across the board led by the Nikkei up 2.1% and the Hang Seng up 1.3%.
Cryptocurrencies are climbing today with Bitcoin up 2.4% and Ether up 3.4% coming off of a weekend crypto conference where speakers included former US President Trump. Gold is up 0.4%. Commodities are drifting lower with Copper down 0.8% and Crude Oil down 0.6%.
A busy week for earnings started off with a disappointing report from McDonalds who missed expectations on EPS ($2.97 vs street $3.07), sales ($6.5B vs street $6.6B) and same store sales (-1.0% vs street +0.4%). Management blamed the shortfall on consumers cutting back spending on fast food and has re-introduced value meals.
We continue to move through the peak of earnings season with a number of big cap companies reporting results. US headliners include Microsoft*, Apple*, Amazon.com, Booking Holdings*, Meta Platforms, Boeing, Merck, Caterpillar and Exxon Mobil. Canadian headliners include Canadian Pacific, Canadian Natural Resources, Thomson Reuters*, BCE, Fairfax*, and Imperial Oil*.
Treasury yields are sliding a bit this morning as investors await Wednesday’s Fed decision on interest rates. So far this month, the Bank of Canada has cut rates, blaming a slowing North American economy, while the European Central Bank paused. The Fed only has two more chances to cut rates before the election, now and September, so any hints in the comments could potentially be significant if the Fed does not cut rates this week.