Morning Minutes 6/2/2020

Morning Minutes

Stocks and Oil Continue To Climb

May 2, 2020

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

Despite social unrest and political tensions, world markets have continued to climb overnight. Overseas, the Nikkei gained 1.2% and the Hang Seng rose 1.1% overnight, while in Europe this morning, the Dax has soared 3.7%, Milan has rallied 2.2% and the FTSE is up 0.9% as investors continue to anticipate an economic rebound as economies reopen. US Index futures are up 0.3%-0.5% this morning with Dow Futures up 141 points as they look to build on yesterday’s 91-point gain.

Crude oil is up again this morning with WTI rallying 2.0% to trade above $36.00/bbl and Brent jumping 2.3% to move within a dollar of the $40.00/bl level. Investors continue to respond favorably to reports that OPEC+ is apparently working toward extending supply cuts with a meeting on the subject originally planned for next week potentially being moved up to Thursday. Copper is up 0.3% today. Defensive havens like Gold, the US Dollar and the Japanese Yen are on their heels this morning trading flat to down 0.3%.

Its a lighter day for economic news falling between yesterday’s manufacturing PMI reports and the big employment numbers due later in the week. In the US, monthly sales reports from automakers could attract some attention. Visa had an interesting report on payment volumes overnight, indicating that April’s 11% contraction in the US slowed to a 5% contraction in May. International volumes fell by 45% in May but cross-border ecommerce rose by 18% last month.

Tonight could give investors an indication of what the COVID-19 lockdown and shift to remote work has had on some companies with Slack Technologies and Zoom Video* reporting results after the close. Results are for February to April quarters, and management comments on their outlook (whether the recent trend to online collaboration is a short-term blip or a long-term trend accelerating could attract interest from investors.

*Shares of Zoom Video are held in some portfolios managed by SIA Wealth Management.

 

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