Morning Minutes 11/22/2018

Turkey, Football and Shopping in Focus

November 22, 2018
8:45 am EDT

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

It’s Thanksgiving Day in the US and with their markets closed, trading around the world has been pretty quiet. In Asia, the Nikkei and Hang Seng rose slightly overnight while in Europe this morning, the FTSE and Dax are down slightly. The one significant move in world markets today is a 0.75% gain for the British Pound as details on PM May’s Brexit deal with the EU start to come out.

Historically on days when Canada is open and the US is closed, our markets have tended to sit flat or move only slightly on light volume. Toronto finished yesterday with a 218 point or 1.47% gain, better than the flat finish for the Dow and the 0.9% gain for the NASDAQ. The most impressive part of the TSX rally was that strong gains were broadly based across most sectors, not just Energy and Mining. Commodity prices are mixed this morning with energy and copper down slightly while gold is up slightly, so it may take until Friday or even Monday to see if we are going to see much follow through from this. Tomorrow brings Canadian retail sales and inflation reports which could spark some activity in our retail stocks and the Loonie.

Later today, once our American friends have had their fill of food and football, focus turns to the malls and Black Friday, the busiest day of the year for shopping in the US. Shares of several US retailers have been hit hard on both an absolute and relative basis over the last week following their earnings reports, raising questions about this year’s holiday shopping season and lowering expectations. Tomorrow, we’ll start seeing anecdotal reports about traffic and spending but over the weekend we should start to see some estimated numbers for the brick and mortar stores followed by the online retailers into next week following Cyber Monday. In addition to the actual amount of dollars spent, investors may also be looking to see if the resurgence of traditional retailers who survived the 2017 Retail Apocalypse seen earlier this year is continuing or if that was just a blip in a longer-term trend toward online shopping.

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