Morning Minutes 3/4/2020

Morning Minutes

Biden’s Big Night Boosts World Stock Markets; Bank of Canada Preview

March 4, 2020
8:45 am EST

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

This week’s roller coaster ride for world stock markets finds equities on the upswing with Dow Futures up 2.2%. Coming off a big rebound rally Monday, stocks fell back Tuesday but have turned sharply upward again overnight and into this morning.

It appeared initially that yesterday’s surprise US 0.50% interest rate cut had spooked investors into wondering if economic conditions were worse than thought, a “What does the Fed know that we don’t?” mentality (that should now be put to rest by today’s strong ADP payrolls report 183K vs street 155K). While that may have partly been the case, in hindsight is also appears that uncertainty over the Super Tuesday Democratic primary voting and normal backing and filling also played a role.

Last night’s big wins by moderate candidate Joe Biden (8 states including Texas, Minnesota, Massachusetts and Virginia) over socialist candidate Bernie Sanders (4 states including California and Colorado), gave Biden the overall lead in delegates and calmed investor fears that the Democrats were about to take a hard turn to the left. Michael Bloomberg and Elizabeth Warren didn’t make much headway, essentially leaving this as a two-candidate race moving forward. Needless to say, Donald Trump cleaned up in the Republican primaries while complaining that the Fed didn’t cut enough.

The Bank of Canada decision on interest rates is due at 10:00 am EST this morning. Prior to the coronavirus outbreak, it had appeared that Bank of Canada Governor Poloz was prepared to ride out the rest of his term and leave the next move to his successor. With the Fed and the RBA cutting interest rates already this week, pressure may be increasing on the Bank of Canada to do the same, or to at least signal the potential for a rate cut this spring.

 

Market Update With SIA Wealth Founder and CEO Jeremy Fehr

In light of recent market volatility, Jeremy has recorded a 17-minute webinar video with his current thoughts on the SIA Charts Equity Action Calltm, recent action in equity and commodity markets, and his analysis of key charts. To access the video, please click on the link below:

https://register.gotowebinar.com/recording/2494196353438372610

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