January 7, 2019
8:45 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
+1 (647) 282-4428
Special Event: BMO SIA Focused Funds Webinar With Jeremy Fehr
Date: Wednesday, January 9, 2019
Time: 2:00 pm EST, 12:00 pm MST
SIA Wealth Founder and CEO Jeremy Fehr will be providing a market update and an inside look into SIA Wealth Managementâ€™s investing process, particularly as it relates to our two new Exchange Traded Funds, the BMO SIA Focused Canadian Equity Fund (ZFC), and the BMO SIA Focused North American Equity Fund (ZFN). These are tactical equity solutions designed to gain access to the technical and relative strength analysis expertise of SIA Wealth Management in a high conviction, unconstrained portfolio of 15+ equities.
Morning Market Commentary
Coming off a big rally Friday that saw the Dow Industrials nearly 750 points or 3.3%, world markets have been mixed overnight and into this morning. On Friday the US announced a spectacular December jobs gain of 312K, way above the 177K street estimate. Canadaâ€™s 9K job growth was nothing to sneeze at either, beating the 5K street estimate. Less hawkish comments from Fed Chair Powell on interest rate increases (open to changing plans depending on data) and running down the Fedâ€™s balance sheet (could pause if necessary) were greeted positively, sparking a late surge in US stocks. Recall that Chair Powellâ€™s stay the course tone after the December Fed meeting had sparked a plunge in US stocks.
Asia Pacific markets staged a catch-up rally with the Nikkei gaining 2.4% and the Hang Seng climbing 0.8% as investors await this weekâ€™s start to US-China trade talks.
Brexit chaos has resumed weighing on European markets where the FTSE and Dax are both down 0.5%. The UK is still scheduled to leave the EU in late March, but a lot is still uncertain with the UK Parliament expected to vote on PM Mayâ€™s divorce deal with the EU next week. A 1.0% decline in German factory orders, which was worse than the 0.5% drop that had been expected, has reminded investors that political turmoil could potentially have a negative economic impact on both sides of the channel.
US futures have been pointing toward a mixed open with Dow futures up 16 points and S&P futures down 1 as some investors digest Fridayâ€™s gains and some return to work with the holiday season now over. Treasury yields are still getting a boost from Fridayâ€™s strong payrolls and higher than expected wage inflation (3.2% above street 3.0%), but the 30-year yield remains below the technically important 3.00% level for now.
Crude oil is up again today with Brent and WTI both trading up about 1.0%. Positive US economic news and anticipation of supply cuts kicking in this month for Canada, OPEC and Russia have helped to shore up prices. Oil appears to be bottoming out at the moment, but it would take breakouts over $50 for WTI and $60 for Brent to signal the start of a new uptrend.
Earnings reports donâ€™t really start until next week and the economic calendar is lighter as well with the main events being a Bank of Canada decision on Wednesday, and US consumer prices Friday. With the exception of Appleâ€™s warning last week, confession season has been quiet so far, it will be interesting to see if any other US multinationals have anything to say or not.
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