Morning Minutes 4/7/2020

Morning Minutes

Stocks and Gold Rally For a Second Straight Day; Exxon Cuts Costs

April 7, 2020

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

Positive momentum coming out of Monday’s world market rally has continued overnight and into this morning. Signs that the growth of coronavirus cases may be peaking in North America and likely has peaked in several European countries has been helping to ease investor fears.

US index futures are up 2.5% to 3.4% this morning led by a 750-point advance for Dow futures as they look to build on yesterday’s 1,627-point, 7.75% rally.  Major European markets are also in the green today with Frankfurt up 3.6%, Milan up 3.3% and London up 2.8%.

The flight of capital into US cash and bonds appears to be subsiding. The US 10-year treasury yield as moved back up toward 0.75% from 0.60% yesterday, indicating a slide in bond prices. The US Dollar is also retreating today, falling 1.0% against the Pound and Euro, 0.75% against the Loonie and 0.3% against the Yen. Gold is also benefitting from the greenback backsliding with a 0.7% move back up above $1,700/oz.

Crude oil is up again this morning with WTI advancing 1.50% toward $26.50/bbl and Brent gaining 2.2% toward $33.75/bbl. Investors continue to anticipate a production deal between OPEC and Russia, possibly as soon as Thursday. There have been rumblings about the US potentially getting involved in a deal, but regardless of whether the country officially signs on or not, US companies may be forced to deal with low prices by cutting production on their own. This morning, for example, Exxon Mobil has announced a 15% cut to operating expenses and a 30% cut to its 2020 capital spending program to $23B which is deeper than the cut to $29B the street had been expecting. We could see more cuts in the coming days and weeks with the shale sector looking particularly vulnerable following the Exxon news and last week’s bankruptcy announcement from Whiting Petroleum.


SIA Wealth Update Webinar With Jeremy Fehr, Wednesday April 8, 2:00 pm EDT

Join Jeremy Fehr, Ted Bader and Paul Vendrinsky of SIA Wealth Management for an update on the current market and how that relates to SIA Wealth Management portfolios. Webinar audio will be available through computer VoIP or dial in using your phone.

Click Here To Register

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.