Morning Minutes 3/19/2020

Morning Minutes

US Index Futures Sink Again As Jobless Claims Start To Rise

March 19, 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

Yesterday was a stranger than usual day for US markets. An intraday selloff saw the Dow Industrials fall below 20,000, dive toward 19,000, in the process erasing all of the gains that had been made since President Trump’s inauguration, and then bouncing back in the last hour but still finishing short of 20,000 at 19,898. For the first time in some time, there was a fairly wide variation in North American index returns with the Dow down 6.4%, the S&P down 5.1%, the NASDAQ down 4.7%, the Russell 2000 down 10.9% and the S&P/TSX down 8.7%. These differences in performance among indices suggests that relative strength / stock picking may be coming back out of hibernation after three weeks of market action being dominated by apparent across the board selling and what seems like forced blanket liquidations.

US index futures have resumed their retreat this morning, but declines have been smaller than this time yesterday, Dow Futures are down 481 points or 2.4% trading at 19,372, above yesterday’s low. NASDAQ futures are down 1.5% to 7,098, holding above the 7,000 level.

Overseas, European markets are mixed with Milan rising 1.0%, Frankfurt falling 0.8% and London declining 1.5%. The ECB announced a 750 billion Euro asset purchase package but as with stimulus moves from other central banks, that hasn’t been enough to shore up shattered investor confidence. Asia Pacific market declines varied from 8.4% for Seoul to 3.4% for Sydney to 1.0% for Shanghai.

In commodity trading, crude oil is on the rebound. WTI has popped 8.3% toward $22.00 following a successful test of $20.00. Brent is up 3.1% and back above $25.00. Copper, however, remains under pressure, falling 0.5%.

Capital continues to flow into the US Dollar gaining 1.7% against the Yen and Euro, 0.7% against the Loonie, 0.2% against the Pound and 0.5% against Gold which is down to $1,470/oz. The 10-year treasury yield is holding steady near 1.20%.

In economic news, US initial jobless claims jumped last week to 281K from 211K a week ago, the street had been expecting 220K. This suggests a spike in layoffs related to some of the recent short-term business closures from coronavirus containment efforts may be starting.

New Video: Market Commentary and Portfolio Update – March 18, 2020

With Jeremy Fehr – Founder and CEO, and Paul Vendrinsky Portfolio Manager of SIA Wealth Management

Click Here to watch a new webinar of Jeremy Fehr, founder of SIACharts and SIA Wealth, discussing additional changes in the Asset Class Rankings, what he is seeing in the markets currently, and the impact going forward. SIA Wealth Portfolio Manager Paul Vendrinsky discusses recent changes and performance in the portfolios that SIA Wealth Management sub-advises for BMO Global Asset Management. A PDF version of the presentation is available. We will record another update if there are changes so please watch for future updates.

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