Morning Minutes 09/10/2018

Morning Minutes

China Approaches Bear Market With Trade Woes in Focus

September 10, 2018
10:45 am EDT

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Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

China has taken over the spotlight to start the new trading week. The Hang Seng fell 1.3% while Shanghai fell 1.45% to approach the official Bear Market signal of a 20% decline off the previous high. Traders remain concerned about the potential that US trade actions could impact its economy. Over the weekend, China reports a smaller than expected trade surplus of $27.9B, the street had been expecting $31.8B. Export growth of 9.8% was less than expected while import growth of 20.0% was more than expected.

US President Trump has been threatening to impose tariffs on another $200B of Chinese imports in a bid to encourage US manufacturers to bring production home. Apple is down 1.9% this morning after the company indicated that it’s products could be impacted by the next round, which led to criticism from the President on Twitter. More importantly the spat between President Trump and Apple highlights that the trade war is broadening out from traditional areas of contention like steel, agriculture and autos, into more sectors of the economy.

In addition to whatever may happen with China, trade talks with Canada resume this week as well. The Loonie has been holding steady so far, while the S&P/TSX is up 0.3% in early trading. It’s a busy week for earnings from Canadian retailers with Hudson’s Bay reporting Tuesday followed by Roots on Wednesday and Dollarama on Thursday.

Other economic news expected this week include US inflation and retail sales numbers, plus monetary policy decisions and statements from the Bank of England and the European Central Bank both Thursday morning.

SIA Wealth in the Media:
Colin Cieszynski appeared on BNN Bloomberg this morning as Guest Co-Host on The Street with Paul Bagnell. Below are links to replays of some of the segments. If you have trouble clicking through, copy the link to your browser.

https://www.bnnbloomberg.ca/video/the-big-three-trump-pressures-apple-nafta-talks-stall-10-years-since-lehman-brothers-collapse~1484725

https://www.bnnbloomberg.ca/video/watch-for-a-trip-in-the-markets-but-expect-a-strong-finish-to-the-year-strategist~1484771

https://www.bnnbloomberg.ca/video/oil-in-the-sweet-spot-market-strategist~1484783

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