Morning Minutes 12/12/2018 and Webinar Information

Bulls Show Some Backbone; Oil Rally and UK Political Chaos In Focus

December 12, 2018
8:45 am EST

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

After nearly three months of the bears dominating the discussion, this week’s market action has been increasingly indicating that bulls are starting to get up off the mat and back on their feet. Building on Monday’s bullish rebounds, US indices took everything the bears could throw at them yesterday, but instead of capitulating and finishing down sharply again, like they did last Friday, stocks bounced back in the afternoon enabling a positive finish for the NASDAQ and only minor declines for the Dow and S&P.

Today finds world markets climbing again. The Hang Seng rallied 1.6% overnight, while the Nikkei gained 2.1%. Meanwhile, Dow Futures are up 161 points or 0.6%, pointing toward a positive US open.  Speculation surrounding trade talks between the US and China continue to influence sentiment with reports of potential progress and President Trump indicating he could intervene in the case of Huawei’s arrested CFO if it would help to get a trade deal done have boosted spirits.

US consumer prices rose by 2.2% over year, in line with expectations. As we move further into December, pressure from tax loss selling may ease as well and demand for stocks could increase once confidence improves enough for investors to put cash back to work.

Crude oil continues to climb this morning with WTI and Brent both up about 1.2%. Last night API reported a 10.1 mmbbl drawdown of US oil inventories last week, compared with a 5.3 mmbbl increase the week before. Later this morning (10:30 am EST) DOE inventories are due with the street expecting a 2.9 mmbbl drawdown to follow last week’s 7.3 mmbbl decrease.

This afternoon, between 1:00 and 3:00 pm EST, Conservative UK MPs are expected to hold a vote of non-confidence in their leader PM Theresa May. The Brexit bandwagon has already hit a number of potholes this week with EU leaders refusing to renegotiate and PM May postponing the Parliamentary vote on her existing deal with the EU. While some see a potential change in leader as adding to chaos, it’s also possible such a move could clear the air on things and allow the bickering parties within the UK to find a way forward. Heading into the vote, the British Pound is up 0.9% against the US Dollar, while the FTSE is up 1.2% on the day so far.


Upcoming Events: Thursday Webinar

SIA Charts will be hosting its monthly webinar on Thursday December 13th at 1:00 pm EDT which will include comments on the market from Chief Market Strategist Colin Cieszynski and information on the new SIA Models section of the SIA Charts website.

Click on the link below to register for the event and receive the call-in details.

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