Over the weekend, OPEC+ announced that reductions to production cuts which had been planned for December (originally October) have been postponed again. This news, has ignited a 3.1% rally in the US Crude Oil price pushing it back up above $71.50/bbl and a 2.9% rally in the price of Brent Crude pushing it back up above $75.00/bbl. While this indicates that OPEC+ is still prepared to defend the US Oil price near $70.00/bbl, it also suggests that demand conditions remain too soft for producers to increase production. Metals trading is quiet today, meanwhile, with Gold steady near $2.750/oz and Copper up 0.9%.
US Index futures are holding steady this morning trading flat to up 0.2%, while in Europe, the Dax is flat and the FTSE is up 0.6%. The US 10-year treasury note yield is down slightly, trading near 4.25%.
Investors appear to be in a holding pattern today waiting for this week’s big news events. The US Presidential Election is Tuesday which means results are more likely to impact the market starting on Wednesday. On Thursday, the Fed and the Bank of England are both expected to deliver 0.25% interest rate cuts, while the Reserve Bank of Australia is expected to hold its benchmark rate steady tonight. It’s a quieter week for economic news headlined by China trade data on Thursday and Canada employment on Friday.
With most of the US mega cap companies having reported results now, earnings season shifts into its next phase with a large number of mid and small cap stocks reporting results. Today hotelier Marriott International posted disappointing results ($2.26 vs street $2.31). It’s a big week for results in Canada with headliners including Sun Life today, Thomson Reuters* tomorrow, Manulife Financial* and Great West Life on Wednesday, TC Energy and BCE on Thursday and Constellation Software* on Friday. Also on Friday, in a sign of the times, Nvidia replaces Intel in the Dow Jones Industrial Average.
*Shares of Thomson Reuters, Manulife Financial and Constellation Software are held in portfolios managed by SIA Wealth Management.