Morning Minutes 09/27/2018

Morning Minutes

Everybody’s Talking, But Will They Have Anything to Say?

September 27, 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

The biggest development in world markets overnight has been that US treasury yields have continued to drift back downward, indicating that resistance near 3.12% for the 10 year and 3.24% for the 30-year. Rates remaining below those levels would be supportive for stock and bond prices, but look out below if those levels get breached to the upside.

Stocks and commodities are off to a positive start this morning. Brent Crude continues to trade comfortably above $80.00/bbl which has reversed polarity to become new support, while Silver has been stabilizing near $14.40/oz. The Dow and the S&P/TSX are both up 0.3%.

It’s a big day for central bank speeches with ECB President Draghi, Band of England Governor Carney, Federal Reserve Board Chair Powell and Bank of Canada Governor Poloz all scheduled to speak today. Unfortunately, unless one of them actually has something new to say markets are unlikely to move.

Investors may look to comments from Draghi about how the ECB plans to wrap up its asset purchase program by the end of the year and any hints about what they plan to do next. Governors Carney and Poloz are somewhat handcuffed by trade negations at the moment, Brexit for the UK and NAFTA for Canada, leaving them restricted in their movements while trying to manage the risks of a negative outcome. Of the group, the least likely to have anything new would appear to be Powell following yesterday’s flurry of news from the Fed including his statement, press conference, the rate hike and the new Fed member projections including the dot plot. Currency and fixed income markets tend to move first on central bank news and then on to stocks through that lens.

Cameco shares are up 18% in early trading today after the company won a tax case against the Canada Revenue Agency. This doesn’t really change the uranium market or the company’s business prospects, so it could be seen as a one-time event.

SIA Wealth in the Media:
Colin Cieszynski was quoted by Dow Jones in Marketwatch.com weighing in debate on what impact tomorrow’s Kavanaugh hearing in Congress may have on the markets.
https://www.marketwatch.com/story/stock-market-could-grind-down-to-half-its-average-volume-during-kavanaugh-hearing-strategist-speculates-2018-09-26

Colin Cieszynski’s weekly podcast with Business for Breakfast is available, covering interest rates, oil, trade talks and more: Colin’s part starts 28 minutes into the program.
https://omny.fm/shows/business-for-breakfast/sept-26-2018-hr-2

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