Morning Minutes 3/30/2020

Morning Minutes

Steady Stocks Await Quarter-End and Economic News

March 30, 2020

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

Coming off several weeks of high market volatility, its welcome but almost odd to see world markets holding steady as the new trading week opens. US index futures are mixed with Dow Futures down 1 point, while NASDAQ futures are up 27 points or 0.3%.

Overseas market action has also been mixed. In Europe, Milan, Paris and London are down 1.2%-1.6%, while Frankfurt is down 0.5%. In Asia Pacific trading, Sydney soared 7.0% led by a big rebound for Australian banks, while the other major indices varied from flat for Seoul to a 1.5% drop for Tokyo.

Other asset classes have been more active. In commodities, crude oil is getting hammered again on expectations for a steep drop in demand from reduced travel after President Trump extended US social distancing guidelines to April 30. WTI is down 6.75% and retesting $20.00/bbl while Brent is down 9.1% near $22.75, ahead of tomorrow’s official end to the OPEC+ supply control agreements. Gasoline is down 10.4% despite reports of North American refineries reducing production. Copper, meanwhile, is down 0.3%. US bonds are up slightly with the 10-year treasury yield down slightly to 0.65%. The US Dollar is broadly up today, gaining 1.25% against the Loonie, 1.0% on the Euro and Gold and 0.35% against the Pound.

Although off to a quiet start, this has the potential to be another active week for world markets. Tonight brings Chinese PMI reports for March with investors looking for any signs of a rebound from the dismal February reports. Tuesday is the last day of the month and quarter, plus the fiscal year end for many companies in the investment industry including brokerages and asset managers.

Through the early part of the week we could potentially see some window dressing but the main battle remains between the bears and the bargain hunters. Moving into April, the economic and corporate earnings outlook may dominate discussion. This week may start to add more colour to the economic impact of COVID-19 containment measures with US ADP payrolls and global Manufacturing PMI numbers out on Wednesday followed by US nonfarm payrolls and global Service PMI numbers on Friday. Investors may also start to look ahead to earnings season with confession season starting Wednesday and potentially bringing new profit warnings and/or clarifications of previous warnings.

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