Market Brief: Brexit Takes a Backseat to Earnings Onslaught

See a summary of the top market themes and trends from today's US trading session!

CI: View our guide on how to interpret the FX Dashboard.

  • The EU reportedly will not make a decision on whether to grant a Brexit extension to the UK until Friday, though most analysts believe it’s highly likely. BoJo’s team continues to threaten to call for an election if Brexit is delayed.
  • FX: The British pound was the strongest major currency on the day, as traders see either a Parliament-approved deal or an early election as likely to remove the uncertainty surrounding Brexit. The Japanese yen was the day’s weakest major currency.
  • Turkey’s lira surged higher after President Trump indicated he would likely remove sanctions on the country.
  • Commodities: Oil surged more than 3% on the day, helped by a surprise drawdown in crude inventories. Gold ticked about 0.5% higher.
  • Bitcoin fell to its lowest level since May and is now testing a critical support zone in the $7200-7400 range.
  • US indices edged higher after a late afternoon rally as traders digested a swath of key earnings releases from top-tier stocks (see below)
  • Energy stocks (XLE) were the strongest sector again today while Consumer Discretionary stocks (XLY) brought up the rear.
  • Stocks on the move:
    • Boeing (BA) rose 1% despite reporting disappointing earnings on the continued fallout from the 737 Max Air debacle.
    • Caterpillar (CAT) also tacked on 1% despite missing earnings and revenue forecasts. Temporary dealer inventory fluctuations played a role in the earnings miss.
    • Texas Instruments (TXN) dumped -7% after missing revenue estimates and issuing downbeat Q4 guidance.
    • Beyond Meat (BYND) shed another -8% today and is now down more than 60% from its peak.
    • Today’s after-the-bell earnings reports included Tesla (TSLA), Ford (F), Microsoft (MSFT), Paypal (PYPL), and eBay (EBAY), so expect volatility in those top-tier names tomorrow.

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