April 30, 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
US index futures are holding steady this morning, consolidating yesterdayâ€™s gains. Dow futures are up 16 points following a 532-point gain yesterday. European markets are down with the Dax falling 0.7% and the FTSE falling 1.4%.
Its a big day for economic news, which has been mixed.Â US jobless claims increased by 3.8M which was worse than street 3.5M but still downÂ from 4.4M last week. Continuing claims of 17.9M were up from 15.8M last week but better than the 19.2M street estimate claims, and better than the 26.2 million initial claims reported over the last five weeks.
EU Q1 GDP fell 3.3% from a year ago, slightly worse than the 3.1% drop the street had expected, with Spain contracting 4.1% and France contracting 5.8%. The European Central Bank maintained its lending rate at todayâ€™s meeting but indicated it stands ready to bring in additional monetary stimulus if needed.
China announced released mixed PMI results with government non-manufacturing PMI increasing (53.2 vs previous 52.3) but government manufacturing PMI (50.8 vs street 51.0) falling short of expectations and Caixin manufacturing PMI slipping back under 50 (49.4 vs 50.1). US Chicago PMI is due at 9:45 am EDT with the street expecting a drop to 38.0 from 47.8 last month. National manufacturing PMI reports for several countries including the US and Canada are due tomorrow morning.
Crude oil is up again today with WTI rallying 15.4% toward $17.40/bbl and Brent crude rallying 12.0% to $25.00/bbl. Investors appear to be responding favorably to ConocoPhillips decision to voluntarily cut production in May by 265K bbl/d or about 20% from its Q1 average production. Investors may look for more signs of falling North American supply as Big Oil earnings roll out over the next few days.
Weâ€™re now into the peak of earnings season with a number of big names, particularly in the technology sector, reporting overnight. Highlights include:
Facebook is up 7.6% in premarket trading despite mixed results as EPS missed expectations ($1.71 vs street $1.75) but revenues beat expectations ($17.74B vs street $17.41B). Management indicated that revenues dropped off in March but have stabilized. The company cut its capital budget for 2020 to $14-$16B from $17-$19B.
Microsoft* beat the street on earnings ($1.40 vs street $1.26) and sales ($35.0B vs street $33.6B). Management indicated that the impact of COVID-19 could hit in future quarters. Management guided for next quarter sales in the $35.8B-$36.8B range above street $36.4B. This guidance suggests a growth rate of about 8% for the June quarter, down from about 15% in the March quarter.
Results are due later today from Apple*, Amazon.com, Twitter, Visa, Gilead Sciences, Whirlpool and others in the US. In Canada today results are due from gold producers Agnico-Eagle, Eldorado and Yamana, plus Open Text and Imax.
*Shares of Apple and Microsoft are held in some portfolios managed by SIA Wealth Management.
New Video: Market Commentary and Portfolio Update â€“ April 29, 2020
With Jeremy Fehr â€“ Founder and CEO, Paul Vendrinsky â€“ Portfolio Manager and Ted Bader – President of SIA Wealth Management
A new webinar video of Jeremy Fehr, founder of SIA Charts and SIA Wealth, discussing current trends in world markets, and Ted Bader, President of SIA Wealth discussing advisor strategy is now available. A PDF version of the presentation is available.
GoToMeeting Version: https://attendee.gotowebinar.com/recording/5063142600833304578
YouTube Version: https://youtu.be/fgZMoxEyu9I
Disclaimer:Â 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.Â 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.