Morning Minutes 10/03/2018

Morning Minutes

Strong ADP Payrolls Send Stocks Soaring, Energy Rally Impacts Transports

October 3, 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
ccieszynski@siawm.com
+1 (647) 282-4428

It’s looking like another banner day for US stock markets. Taking the baton from gains across Europe this morning, and propelled upward by a very strong ADP Payrolls report (230K way above street 185K), the Dow Industrials have broken out to another new all-time high rising 125 points or 0.45%, with the S&P 500 and NASDAQ 100 close to highs of their own. The S&P/TSX Composite, meanwhile is steady on the open.

Commodity prices are also on the rise once again. The energy sector is being led higher today by Natural Gas which is up 0.9% and has cleared $3.20/mmbtu with the peak demand winter season approaching. WTI and Brent Crude are holding above $75.00/ bbl and $85.00/bbl respectively as reports swirl that Russia and Saudi Arabia are quietly increasing production but not enough to offset lost Iranian production due to sanctions.
Meanwhile, metals are also on the rise again with Silver up 0.6%, Copper up
0.4% and gold consolidating yesterday’s move back up above $1,200/oz.

Energy and mining stocks may continue to benefit from renewed interest based on rising commodity prices. Transportation stocks, on the other hand may struggle as higher fuel prices may cut into their profit margins. Because of this, the Dow Transports have started to turn downward and may not confirm the Dow Industrials new high, a potentially bearish technical signal that investors should monitor, particularly since the broader Russell 2000 has also been weakening in recent days.

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.