Morning Minutes 09/19/2018

Morning Minutes

Stocks Keep Climbing the Wall of Worry

September 19, 2018
10:00 am EDT

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

North American stocks markets continue to climb today as investors look ahead to next month’s earnings season. The US economy has been humming along providing a positive environment for corporate earnings and support for stocks in the face of seasonality and uncertainty.

We’re moving into the back half of what has historically been the weakest and most volatile time of the year for stocks. While overseas markets have been rocked by trade war fears, US stocks have been able to shrug off external concerns. I’ve mentioned that the divergence between the rising S&P and the falling Hang Seng may need to close at some point. As we head toward the fall, it’s looking increasingly like the stage is being set for a possible catch up rally in depressed China sensitive markets like copper and the Hang Seng,

WTI crude oil is holding steady near $70.00/bbl after a 1.25 mmbbl build cooled enthusiasm a bit, even though it looks like a normal reversal following a big 8.6 mmbbl drawdown last week. DOE inventories are due mid-morning today which could spark more activity in the oil market. The street is expecting a 2.7 mmbbl drawdown.

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Relative Strength and Sector Rotation Report:
In the US, Railroads have been attracting renewed attention this week as investors speculate a strong US economy could boost demand for freight transportation. In Canada, Forest Products stocks continue to have their ups and downs coming under pressure this week as NAFTA talks resume.

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