Morning Minutes 09/20/2018

Morning Minutes

Dow Retests It’s All-Time High as S&P Prepares For Big Sector Changes

September 20, 2018
10:00 am EDT

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

North American stock markets remain an island of resilience in a turbulent world this morning. The Dow has opened up over 200 points or 0.8% on the open and has moved to within 40 points of its all-time high set back in January. In the last couple of months, the Dow Transports, NASDAQ 100, S&P 500, and Russell 2000 have all shrugged off their early 2018 weakness. A breakout by the Dow Industrials would provide the final confirmation that the underlying bull market in US stocks has resumed. The S&P/TSX Composite is up 0.4% and trading above 16,200 but it’s still well short of its July peak which was closer to 16,600.

Economic news flow out of the US remains positive. The Philadelphia Fed Manufacturing Index beat the street 22.9 to 17.0, a big jump up from last month’s 11.9. Weekly jobless claims fell to 201K better than the 210K the street had expected.

Investors should note that next week, S&P is rolling out major changes to a number of sectors. The old Telecommunications sector is going to be expanded dramatically with the addition of Media and Internet companies, who will be moving over mainly from the Technology and Consumer Discretionary sectors. Some of the companies likely to be impacted include Disney, Facebook. Alphabet (Google) and Netflix.

There are a number of articles available on the Internet about the upcoming change, here is one I found of interest.

https://www.businessinsider.com/sp-500-gics-sector-reclassification-to-create-communication-services-2018-8

Relative Strength and Sector Rotation Report:
Canadian Forest Products stocks continue to struggle with the price of Lumber having dropped from $475 toward $350 in the last month, and US Canada trade talks continuing.

SIA Wealth in the Media:
The replay of Colin Cieszynski’s weekly podcast with Jimmy Sengenberger on KDMT Money Talk 1690 is available. This week’s topics include trade, seasonality, earnings, oil prices, the impact of Fedex results on the transportation sector and more.

The replay of Colin Cieszynski’s weekly podcast with Jimmy Sengenberger on KDMT Money Talk 1690 is available. This week’s topics include trade, seasonality, earnings, oil prices, the impact of Fedex results on the transportation sector and more. Colin’s part starts at 27 minutes into the hour and runs for about 20 minutes.

https://omny.fm/shows/business-for-breakfast/sept-19-2018-hr-2

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