Market Update
US tsys higher, yields ~1bps lower with the 10Y 1.57% , very heavy overnite volume in TY futures (970k). US equity futures rebounding from earlier losses after China trade retaliation threat. Walmart up 7% pre-mkt on Q2 eps beat & revised outlook. US Retail Sales rose 0.7% – strongest reading since March, vs 0.3% exp. , while the Phili Fed index rose to 16.8 vs 9.5 exp in August. In Canada, GOCs higher, outperforming tsys by 0.5-1bp.
News headlines
Futures Rise on Trade Optimism, Walmart Results: Markets Wrap (Bloomberg) U.S. equity futures rose on trade optimism and results from Walmart Inc. that bolstered confidence in the American consumer. Treasuries resumed their rally on persistent worries about global growth.
TSX futures down as oil prices drop (Reuters) Futures pointed to a lower opening for Canada’s main stock index on Thursday, as recession worries and rising U.S. crude inventories hurt oil prices.
Oil Holds Losses as U.S. Stockpile Gain Adds to Recession Fears (Bloomberg) Oil held losses as a surprise gain in U.S. crude stockpiles added to deepening concerns over the outlook for global demand.
China says it must take counter-measures to latest U.S. tariffs (Reuters) China has to take necessary counter-measures to the latest U.S. tariffs on $300 billion of Chinese goods, the finance ministry said on Thursday.
Euro zone bank share meltdown brings prices to brink of 1980s (Reuters) Negative interest rates, toppling bond yields, greater regulation and rising recession signals have wiped out most of the value of European banks, with their shares now at meltdown prices approaching the days of the Berlin Wall.
Online spending helps UK retail sales grow unexpectedly in July (Reuters) British retail sales unexpectedly edged up in July, helped by the strongest growth in online spending in three years, as consumers continued to support the economy before the Oct. 31 Brexit deadline.
U.S. yield curve remains inverted for second day (Reuters) The U.S. yield curve was inverted for the second straight trading session on Thursday, as investors’ concerns that the world’s biggest economy could be heading for recession deepened. US2US10=RR
Market Overview: US 10yr note futures are up 0.144% at 130-23, S&P 500 futures are up 0.45% at 2853.5, Crude oil futures are down -1.12% at $54.61, Gold futures are down -0.23% at $1524.3, DXY is down -0.09% at 97.896, CAD/USD is down -0.05% at 0.7512.
| Cda Benchmarks | Yield | Tsy Benchmarks | Yield |
| 2 Year | 1.33% | 2 Year | 1.532% |
| 5 Year | 1.174% | 5 Year | 1.458% |
| 10 Year | 1.121% | 10 Year | 1.547% |
| 30 Year | 1.332% | 30 Year | 1.979% |
US Economic Data
| 08:30 AM | Empire Manufacturing, Aug Survey: 2.0 Actual: 4.8 Prior: 4.3 |
| Nonfarm Productivity, 2Q P Survey: 1.40% Actual: 2.30% Prior: 3.40% | |
| Unit Labor Costs, 2Q P Survey: 2.00% Actual:2.40% Prior: -1.60% | |
| Philadelphia Fed Business Outlook, Aug Survey: 9.5 Actual:16.8 Prior: 21.8 | |
| Retail Sales Advance MoM, Jul Survey: 0.30% Actual: 0.7% Prior: 0.40% | |
| Retail Sales Ex Auto MoM, Jul Survey: 0.40% Actual: 1.0% Prior: 0.40% | |
| Retail Sales Ex Auto and Gas, Jul Survey: 0.50% Actual: 0.90% Prior: 0.70% | |
| Initial Jobless Claims, Aug 10 Survey: 212k Actual: 220k Prior: 209k | |
| Continuing Claims, Aug 3 Survey: 1685k Actual: 1726k Prior: 1684k | |
| 09:15 AM | Industrial Production MoM, Jul Survey: 0.10% Prior: 0.00% |
| Capacity Utilization, Jul Survey: 77.80% Prior: 77.90% | |
| 09:45 AM | Bloomberg Consumer Comfort, Aug 11 Survey: — Prior: 62.9 |
| 10:00 AM | NAHB Housing Market Index, Aug Survey: 65 Prior: 65 |
| Business Inventories, Jun Survey: 0.10% Prior: 0.30% | |
| 04:00 PM | Net Long-term TIC Flows, Jun Survey: — Prior: $3.5b |
| Total Net TIC Flows, Jun Survey: — Prior: $32.9b |
Canadian Economic Data
| 09:00 AM | Existing Home Sales MoM, Jul Survey: 3.30% Prior: -0.20% |
Disclosure and Disclaimer
The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.
Ivan Greenstein, Stephan Buu, Émile Bordeleau
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.
Tel : (514)-861-0240
Fax: (514)-861-3230