May 15, 2020
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Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428
World markets have been mixed this morning as investors consider a growing war of words between the US and China with the US threatening to block semiconductor shipments to Chinaâ€™s Huawei, and China threatening to retaliate against senior US technology and aerospace companies. This adds to growing concerns that the COVID-19 pandemic and other factors could sour US-China political and trade relations and negatively impact implementation of the US-China Phase I trade deal.
There are a number of economic reports from around the world for investors to digest today. Here in North America, US retail sales plunged 16.4% in April, worse than the 12.0% drop investors had been expecting. Meanwhile, the Empire State Manufacturing Survey improved to -48.5 from 78.2 the previous month and as not as bad as the -63.5 reading investors had been expecting. US industrial production is due at 9:15 am EDT with the street expecting a monthly decline of 11.5%. Capacity utilization is also due at 9:15 with a drop to 64.0% from 72.7% widely expected.
In what could potentially be a preview of things to come in other parts of the world, China posted mixed economic numbers for April, the first month of its economic reopening. Industrial production grew by 3.9% beating the 1.5% street estimate. Retail sales continued to struggle, however, down 7.5% over year, which was worse than the 7.0% decline the street had expected.
European Q1 GDP updates are out this morning with Germany down 1.9% over year, which was worse than the -1.6% street estimate, and the Eurozone down 3.2% over year, which was not quite as bad as the -3.3% street estimate.
US index futures are down 0.8% -1.25% this morning as investors respond to overnight developments, but have been steady following the US retail sales report. Dow futures are down about 200 points, giving back most of yesterdayâ€™s 377-point bounce. In Europe, the Dax and FTSE are both up about 0.8%. Crude oil continues to climb with WTI up 2.9% and trading near $28.25/bbl ahead of this afternoonâ€™s weekly US Baker Hughes drill rig count report. Gold is holding steady just below $1,750/oz.
New Video: Market Commentary and Portfolio Update â€“ May 13, 2020
With Colin Cieszynski â€“ Chief Market Strategist, and Jason Leesui, Vice President of SIA Wealth Management
A new webinar replay is available featuring Colin Cieszynski discussing current trends in world markets, and Jason Leesui continuing his series on Advisor Alpha and portfolio strategy. A PDF version of the presentation is available.
GoToMeeting Version: https://attendee.gotowebinar.com/recording/258195423901245698
YouTube Version: https://youtu.be/QpcANTlq7qM
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