Morning Minutes 6/17/2020

Morning Minutes

Stocks Climb Amid Mixed Economic and Travel News

June 17, 2020

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

Stock markets around the world have continued their rebound overnight. News flow has been relatively light, keeping the focus on yesterday’s better than expected US retail sales and industrial production reports and the recent news that the Fed is planning to start purchasing corporate bonds directly and not just ETFs. Fed Chair Powell continues his testimony to Congress today.

Not all of the news has been positive, however. US housing starts (0.974M vs street 1.095M) and building permits (1.220M vs street 1.28M) for May were steady to slightly improved from April but a bit less than what investors were hoping for. Also, the travel sector continues to struggle with Norwegian Cruise Line suspending most sailings through September, completely losing the summer season, Southwest Airlines only selling two-thirds of available tickets (ie middle seats open) through September, and United Airlines trying to get more of its staff to sign on to voluntary buyouts.

Late yesterday, new Bank of Canada Governor Tiff Macklem indicated the he expects Canadian interest rates to remain low for the foreseeable future with no increases to rates expected until an economic recovery is well underway. Today’s Canadian inflation report which showed consumer prices over month (0.3% vs street 0.7%) and over year (0.7% vs street 1.2%) rising much less than expected, confirming that there’s no pressure on the central bank to raise rates any time soon.

US index futures are up about 0.5% today. Dow futures are up about 135 points, looking to add to yesterday’s 526-point, 2.0% gain. Over in Europe, the Dax is up 0.8% and the FTSE is up 0.7% this morning.  Commodity action is mixed with WTI crude oil down 1.0% between weekly inventory reports and copper up 0.6%. Gold is down 0.6% trading near $1,725/oz.

 

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