Morning Minutes 3/25/2020

Morning Minutes

Market Rebound Stalls as North American Governments Agree On Stimulus

March 25, 2020

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

Coming off of yesterday’s big relief rally that saw the Dow gain 11.3% and the NASDAQ gain 8.1%, market advances have slowed this morning markets which moved upward on anticipation of stimulus packages in the US and Canada now look to deal with the actual news.

Overnight, US politicians in the Senate and the White House agreed on a bi-partisan, $2 Trillion fiscal package to fight the impact of coronavirus on society and the economy with a vote in the Senate scheduled for today. In Canada, early this morning, Parliament passed an $82 Billion stimulus package. Opposition parties (Conservatives and NDP) had already agreed on the fiscal stimulus part and supported the bill after the Liberals walked back some of their requests to shift taxing and spending powers to Cabinet from Parliament. The updated measure cuts the time limit on emergency spending powers to 6 months from 21 months and drops the previous request for the ability to raise taxes without parliamentary approval.

This morning finds Dow Futures flat, while S&P and NASDAQ futures are down about 0.9%. Gains for European indices vary between 0.7% gains for the UK and France to a 0.7% decline for Italy and a 1.3% pullback for Germany.

In currency trading today, The US is backsliding, falling 0.2% against the Euro, and 0.6%-0.7% against the Pound and the Loonie. Precious metals are mixed with gold giving back 1.65% after yesterday’s big rally while silver is up 0.3% and Platinum is up 1.6%. In commodity action, WTI crude oil is down 2.0% trading near $23.50/bbl, while copper is down 0.8%. The US 10-year yield is up slightly near 0.85%.

In economic news today, US durable goods orders for February beat expectations but investors are more likely to focus on March numbers at this point. Similarly, tomorrow morning the US Q4 US GDP update is likely to be ignored but the weekly jobless claims could attract significant attention.

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