Morning Minutes 6/12/2020

Morning Minutes

Stocks In North America and Europe Bounce Back

June 12, 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

Although Asia Pacific trading overnight saw some follow-through from yesterday’s North American selloff, losses moderated and the pendulum has started to swing back toward the bullish side this morning. Yesterday’s 6.9% decline for the Dow moderated to a 0.75% decline for the Hang Seng overnight, while this morning, the Dax is up 0.75%, the FTSE is up 1.0% and Dow futures are up 434 points or 1.75%. Commodity and currency action has been mixed. WTI crude oil is flat, but copper is up 0.9%. Gold is up 0.25% but other havens for capital such as the US Dollar and the Japanese Yen are down today.

With no major economic news overnight, it appears that the recent correction has run its course and bargain hunters have stepped into a market that has bent but not broken so far. It will be interesting to see as the day evolves if the bears return ahead of the weekend, if bulls continue to mount a defense, and how investors may respond (or not) to today’s US coronavirus case count numbers.

There have been some earnings reports of note overnight. Lululemon* reported EPS of $0.22, a penny below street estimates on sales of $651M, which was down 17% over year and short of the $688M the street was expecting. Management did not release same store sales but did indicate that online sales soared 125% in April and jumped to 54% of total sales in the quarter. Adobe, meanwhile, exceeded expectations on EPS ($2.45 vs street $2.33).

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

Disclaimer: 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. 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.