Morning Minutes 9/20/2019

Morning Minutes

Canada In Focus With S&P/TSX at Record High as Energy Price Rally Continues

September 20, 2019
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

The S&P/TSX Composite Index finished Thursday at an all-time high, with recent gains in Financials, Materials and Energy attracting new interest and propelling share prices upward in key Canadian sectors. Canadian retail sales were a bit disappointing with headline growth of 0.4% short of the 0.6% street estimate, but this may not be a huge surprise considering the series of disappointing earnings reports from Canadian retailers lately.

Any disappointment from the retail sales number that may appear in the market today could be offset by improving sentiment toward energy stocks as energy commodity prices continue to climb. With investors adding a political risk premium to the oil price following the recent attacks in production facilities and winter anticipation building in seasonal markets, this morning finds WTI crude up 0.9%, Brent crude up 0.5%, and natural gas up 0.35%.

There has been some chatter this morning about US Indices also trading close to their previous all-time highs, but US index futures are not as close to breaking out as they were a week ago. The order for the price below is today, then Sep 13 future, then previous all-time closing high:

Dow Jones Industrial Average            27,136          27,295           27,332

S&P 500 Index                                          3,104              3,019             3,025

Nasdaq Composite Index                    7,940              8,194             8,330

S&P/TSX Composite Index                 16,858         16,643          16,669

Dow futures are up about 45 points or 0.1% today. Overseas, the Dax, FTSE, Hang Seng and Nikkei are all essentially flat. It appears that on a day of light economic and corporate news in the US, investors around the world are still digesting this week’s political and monetary events and waiting for something new to react to. As we saw last weekend, anything can happen any time, but the next scheduled event for investors to look forward to are the flash manufacturing and Service PMI reports for the US and Germany, which are due on Monday morning. These surveys may give investors their  first glance at how business conditions have evolved into September.

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