Morning Minutes 5/28/2020

Morning Minutes

Hong Kong Tensions and Canadian Banks In Focus

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

Although stock markets are up again in North America and Europe this morning, political stresses in Asia have started to impact trading in some markets. Overnight, China passed the new security law for Hong Kong that it had been threatening, increasing political tensions with the US and other countries. This sparked some regional defensive capital flows, seen particularly in the Hang Seng falling 0.7% while the Nikkei jumped 2.3% and gold gained 0.6%.

Meanwhile US index futures are pointing toward a positive open with Dow Futures up about 170 points or 0.6% as they look to build on yesterday’s 553-point, 2.2% surge. In Europe today, the Dax is up 0.5% while the FTSE is up 1.0%. Commodity markets are also up this morning. WTI crude oil has shrugged off an 8.7 mmbbl increase in US weekly API oil inventories to move into the green on the day, while copper gained 0.5%.

Canadian bank earnings week wraps up today with two more reports. CIBC announced EPS of $0.94 down about 70% from a year ago and short of the $1.60 street estimate as its loan loss provisions spiked to $1.41B from $0.26B in the previous quarter. TD Bank saw its income drop 52% over year announcing adjusted EPS of $0.85, just below the $0.88 street estimate as its credit loss provision soared to $3.2B from $0.91B last quarter.

In economic news, the US reported another 2.1 million initial jobless claims this week, but continuing claims had a surprise drop to dropped to 21.0M from 24.9M and were significantly better than the 25.75M the street had expected. US durable goods orders plunged 17.2% in April, which was not as bad as the 19.0% drop the street had feared. US Q1 GDP was revised down to a 5.0% contraction from -4.8%. Later this morning, US pending home sales and DOE weekly US oil inventories are due.

 

New Video: Market Commentary and Portfolio Update – May 27, 2020

With Jeremy Fehr – Founder and CEO of SIA Wealth Management

A new webinar replay is available featuring Jeremy Fehr, founder of SIACharts and SIA Wealth, discussing current trends in world markets. A PDF version of the presentation is available.

GoToMeeting Version: https://attendee.gotowebinar.com/recording/2618175087442490882

YouTube Version: https://youtu.be/wsn5L2bAZAQ

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