Morning Minutes 5/29/2020

Morning Minutes

Stocks Slide, Gold Rallies Ahead of Trump Press Conference

May 29, 2020

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

The stock market decline which started yesterday afternoon when US President Trump scheduled a press conference for 2:00 pm today to talk about China, has continued overnight and into this morning. Investors have become increasingly concerned about the growing number of possible flashpoints between the US and China which could potentially derail their trade or political relations including: responsibility over the COVID-19 pandemic, Hong Kong’s political future, and others.

Investors appear to be taking a more cautious stance with capital flowing out of equities and back into defensive havens such as gold. Dow futures are down about 110 points or 0.4% this morning, adding to yesterday’s 147-point drop, but NASDAQ futures are up 10 points. Over in Europe, the Dax is down 0.8% while the FTSE is down 1.0%. Meanwhile, gold is up 0.8% and the Japanese Yen is also up.

It’s the last trading day of the month, bringing a number of economic announcements. While the spotlight is on President Trump, Fed Chair Powell is also speaking today, at 11:00 am EDT. US Chicago PMI is out at 9:45 am with the street expecting an increase to 40 from 35.4 last month. Data continues to be distorted by the pandemic. US personal income increased by 10.5% in April when the street had been expecting a 6.5% decline, but personal spending plunged by 13.6%, more than the 12.6% the street had expected. Canadian Q1 GDP came in down 8.2%, which was not as bad as the 10.0% plunge which investors had been anticipating.

US retailers could be active again today with a number of companies having reported overnight including: Costco (EPS $1.89 vs street $1.95), Nordstrom (40% drop in sales), and Ulta Beauty (35% drop in same store sales). On the positive side, Dell Technologies blew away street estimates ($1.34 vs street $0.92) as companies and individuals purchased computers to support working remotely. In Canada, Laurentian Bank slashed its dividend by 40%, raising questions about whether the bigger banks (who maintained their dividends this time around) may have to make cuts in future quarters.

 

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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