Morning Minutes 3/18/2020

Morning Minutes

Falling Oil Drags Down Stocks As Investors Await Stimulus Packages

March 18, 2020
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

The series of large swings in the markets we’ve seen lately has continued overnight. US index futures hit limit down again overnight with Dow Futures back retesting the 20,000 level after an 821-point, 3.9% decline erased much of yesterday’s 1,048-point, 5.2% gain.

Overseas declines have varied. Australia had the largest decline falling 6.4%, dragged lower by an 8.9% drop in WTI crude oil below $25.00/bbl to its lowest level since 2003. While the supply war continues between OPEC, Russia and others, demand expectations continue to decline with air and other travel being curtailed. Most of the other overseas markets have seen declines varying between 1.8% for Tokyo and Shanghai, 3.3% for Milan, and around 5.0% or Frankfurt and London.

Overnight economic news, meanwhile, has been neutral to positive. US February housing starts beat expectations (1.59M vs street 1.50M). Fiscal stimulus packages are on the way for the US and Canada. The Fed meeting wraps up today, with two recent surprise announcements more stimulus appears unlikely, but we may get more commentary on the state of the economy and member forecasts on GDP, inflation and interest rates could attract attention. Based on this, the current forces driving markets sharply upward and downward appear to be an internal battle between liquidators (forced selling from margin calls and redemptions), and bargain hunters.

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.