Indices are holding steady this morning amid a flood of earnings and economic news. US index futures and the Dax are flat, while the FTSE is down marginally.
NASDAQ futures had popped late yesterday on strong earnings from Amazon.com (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) (Google) but that was whittled away overnight.
Today brings earnings reports from Big Oil in the US, Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX). It will be interesting to see if US companies results are as strong as the numbers posted by Suncor Energy Inc (TO:SU) and Total (TO:TOT) earlier on. Big numbers are out this morning from General Motors (NYSE:GM) and Thomson Reuters (TO:TRI).
One theme running through today is likely to be whether markets are still prepared to respond to good news. In the US this week, selected stocks have responded positively to good news but index action has been mixed with the NASDAQ breaking out to a new high but the Dow and S&P forming double tops. This is a concern because technology is a late stage sector. If all the good news out overnight (Microsoft (NASDAQ:MSFT) and intel's reports were also positive) isn't enough to push US indices to new highs today, it could be a sign the seasonal rally has become exhausted.
Currency markets, meanwhile have been responding to economic news. A day after ECB President Draghi indicated no plans to taper further unless inflation picks up, Eurozone CPI took off, sparking a rally in the euro. Meanwhile, an increase in UK GDP has sterling climbing as well. RUB is falling after the Bank of Russia announced a 0.25% interest rate cut. JPY is steady after strong retail sales and housing starts were offset by soft industrial production.
CAD, on the other hand, is under pressure again. Comments from President Trump overnight included talk that he plans to fund US tax cuts through better trade deals, indicating he plans to take a tough stance at upcoming NAFTA talks. He also left the door open to walking away from NAFTA if he doesn't get the deal he wants. Trump will be under pressure to deliver on something with his other big policy planks struggling to get through Congress.
GDP reports for the US and Canada may also potentially move the markets today. In addition to the headline number, inflation measures could attract attention from traders speculating on what could come out of next week’s FOMC meeting. As the day progresses, we could see positioning ahead of the weekend EU summit on Brexit.