Morning Minutes 8/6/2020

Morning Minutes

Gold Climbs, Indices Consolidate as Investors Digest Earnings and Economic News

August 6, 2020

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

Precious metals are up again today with gold climbing 1.0% to a new all-time high near $2,070/oz while Silver has gained another 5.0%. US politicians continue to haggle over additional fiscal stimulus, while across the pond, the Bank of England announced no changes to monetary policy but hinted at the possibility of negative interest rates and additional support if needed in future.

Continuing this week’s positive employment news, US jobless claims of 1.18M last week were better than the 1.41M the street had expected. Continuing claims were also better than expected (16.1M vs street 16.7M and previous 16.95M)  Germany had some positive news announcing that factory orders climbed 27.9 % over month in June, well above the 10.1% rebound the street had been expecting. UK construction PMI also exceeded expectations (58.1 vs street 57.0). China trade numbers are due tonight, followed by tomorrow morning’s US nonfarm payrolls (street 1.6M vs previous 4.8M) and Canada employment reports (street 400K vs previous 953K).

US index futures are down slightly, about 0.1%, this morning, pausing to consolidate yesterday’s gains which varied between 0.5% for the NASDAQ and 1.4% for the Dow. A number of corporate developments are out this morning on both sides of the border for investors to consider.

Bausch Health is soaring this morning, up 20.8% in premarket trading after announcing plans to spin off its Bausch & Lomb eye care business off into a separate public company. In earnings news, Manulife Financial ($0.78 vs stret $0.62), Restaurant Brands International* ($0.33 vs street $0.04), and ViacomCBS ($1.25 vs street $0.95) all beat analyst expectations. Meanwhile, Costco announced a 13.2% July same store sales increase, building on 11% growth in June. Companies scheduled to report results later today include: Uber, Sun Life, BCE, Constellation Software, Canadian Natural Resources, Open Text and Norbord*.

*Shares of Restaurant Brands International and Norbord are held in some portfolios managed by SIA Wealth Management.

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