Morning Minutes 4/17/2020

Morning Minutes

Stocks Rally On Coronavirus Progress

April 17, 2020

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

World stock markets have gone into rally mode overnight, boosted by a series of positive developments related to the COVID-19 pandemic.

First, reports out of a hospital in Chicago, one of several sites in a current trial, suggest that Gilead Sciences (GILD) Remdisivir anitivral drug has shown promise in treating COVID-19. Gilead shares have jumped 10.9% in premarket trading.

Second, US President Trump released a blueprint for how states less impacted by the pandemic or with falling coronavirus cases can start to ease lockdowns and reopen their economies. He suggested that up to 29 states could reopen relatively soon.

Third, Boeing is up 11.2% in premarket trading today after announcing that after implementing physical distancing measures, it’s aircraft plants in Washington State could resume production as soon as next week.

Fourth, China’s economic data was not as bad as some had feared. Its Q1 GDP contracted 6.8% near or better than street estimates which ranged from a 6.5% decline to an 8.3% decline. Looking at monthly data, China’s urban unemployment rate improved to 5.9% in March from 6.2% in February. Industrial production was down 1.1% over year, better than the 7.5% drop the street had expected. Retail sales in March were down 15.8% from a year ago, worse than the 8.0% drop the street had expected but an improvement from the 20.5% over year decline reported for January-February.

Corporate news has been mixed. Procter and Gamble reported better than expected earnings per share ($1.17 vs street $1.13) as stockpiling of personal/household products boosted sales of some products. Medical device maker Intuitive Surgical is up 3.3% in premarket trading after beating beat the street on earnings ($2.69 vs street $2.74) as sales increased by 14% over year. Oilfield service giant Schlumberger, on the other hand, slashed its dividend by 75% and took an $8.5B impairment charge.

The combined impact of all this news has been to propel stock markets upward, particularly in North America and Europe. US index futures are up 1.7% to 3.0% with Dow Futures gaining 699 points. Gains in Europe this morning include 2.4% for Milan, 3.0% for London, 3.6% for Frankfurt and 3.8% for Paris. Commodities are mixed with copper rallying 2.3% but crude oil under pressure again with WTI down 10.0% and trading below $18.00/bbl. With fear easing for the moment, precious metals are in retreat this morning with gold falling 1.2% and silver dropping 1.8%.

 

New Video: Market Commentary and Portfolio Update – April 8, 2020

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

The replay of a new webinar of Jeremy Fehr, founder of SIACharts and SIA Wealth, discussing current trends in world markets and capital flows and SIA Wealth President Ted Bader discussing investment strategies related to the portfolios that SIA Wealth Management sub-advises for BMO Global Asset Management is now available in three places. A PDF version of the presentation is available.

New Webinar Section of the SIA Wealth Website: https://www.siawealth.com/webinars/

GoToMeeting Replay: https://attendee.gotowebinar.com/recording/3495181844710419457

YouTube Replay: https://youtu.be/ccG4gMR1BZ0

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