Morning Minutes 09/13/2018

Morning Minutes

Central Banks and Trade Talks in the Spotlight

September 13, 2018
10:00 am EDT

At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

Stock markets around the world are on the rebound today amid reports that the US and China have both signaled openness to a new round of trade talks in an attempt to diffuse their growing trade war and avert another, larger round of tariffs and countermeasures. The Hang Seng bounced 1.6% overnight. The Dow is up 125 points on the open today or about 0.5%, while the S&P/TSX is steady.

Currency markets are quite active this morning between the reaction to trade news and a number of big central bank developments. The US has eased back, enabling a number of depressed currencies to rebound.

The Turkish Lira is up nearly 3.0% today, a huge move for a currency in a single
day. Turkey’s central bank pushed its benchmark rate up to 24.0% from
17.75% much higher than the 22.0% street estimate in a bid to shore up support amid a political and financial crisis.

The British Pound is up 0.3% after the Bank of England’s Monetary Policy
Committee voted 9-0 maintained its benchmark rate at 0.75%, confirming the
previous meeting’s rate hike. The Bank raised its Q3 GDP growth forecast to
0.5% from 0.4% a sign of confidence although it also warned of the growing risk of a no-deal Brexit.

The Euro is up 0.45% after the European Central Bank confirmed its plan to cut asset purchases to €15B a month in October and to end bond purchases by the end of this year.

Relative Strength and Sector Rotation Report:
Two sectors that had been depressed in the summer have been showing signs of life lately.

In Canada, forest products stocks have been attracting renewed interest. The sector has been on a roller coaster ride this year amid the ups and downs of trade discussions between Canada and the US, and threats of tariffs.

In the US, drug store stocks have been showing signs of life. The sector has been pounded this year amid fears that Amazon increasing its presence in online prescriptions could impact the outlook for brick and mortar drug stores. Still, sectors that are focused mainly on the US domestic economy have been attracting interest lately and it’s possible some contrarians may be trying to hunt for bargains in the depressed group.

Upcoming Events: Webinar Today
SIA Charts will be hosting its monthly webinar on Thursday September 13th at 1:00 pm EDT which will include comments on the market from Chief Market Strategist Colin Cieszynski and information on our new Relative Strength Spotlights.

On this call we will also hear from Ted Bader, President of SIA Wealth about the 2 Funds SIA Wealth runs, specifically focusing on the strong performance of the US tactical pool as well as recent changes that have been made to the Tactical Market Neutral Pool.

Click on the link below to register for the event and receive the call-in details.

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