Morning Minutes 8/10/2020

Morning Minutes

Energy and Metals Rally To Start the Week

August 10, 2020

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

The new trading week finds precious metals resuming their upward course with Gold rising 0.7% and Silver rallying 3.3%. Over the weekend US President Trump signed executive orders extending fiscal economic support measures after congressional leaders failed to reach an agreement.

Commodities, meanwhile, are off to a strong start this week, WTI Crude Oil gaining 1.4% and Brent Crude rising 0.8%. Over the weekend, Saudi Aramco indicated it expects energy demand to recover as economies in Asia continue to reopen, which also appears to have spilled over into the copper market. Iraq’s decision to cut back production for a couple of months to bring it in line with its OPEC+ commitments. Upbeat sentiment related to resource demand appears to have spilled over into other commodities with copper climbing 2.75%.

Stock markets around the world are mixed to start the new week. US index futures are split between a flat NASDAQ and a 0.3% gain for the Dow. Over in Europe, the Dax is up 0.4% and the FTSE is up 0.5%. Resource-weighted Australia led the charge in Asia Pacific trading with a 1.75% gain, while Hong Kong fell 0.6% and Japan slipped 0.4%.

It’s a mixed day for North American earnings reports. Barrick Gold beat expectations on earnings ($0.23 vs street $0.19) while Marriott reported worse than expected losses (-$0.64 vs street -$0.42) as the travel sector struggled.

The coming week is looking to be lighter for business news. Earnings season has passed its peak and the schedule is dominated by smaller companies. Macy’s is scheduled to report results on Wednesday but the rest of the US retailers don’t report until next week. Retail sales and industrial production numbers for China and the US are due on Friday and the only significant reports before those are US inflation reports midweek. In Canada, Nutrien is scheduled to report results later today with Cineplex and Canadian Tire results expected on Thursday.

As focus starts to shift from US earnings season to US election season, one potential political development to keep an eye out for this week is the possible announcement of a running-mate for Democratic presidential candidate Joe Biden ahead of next week’s Democratic National Convention (August 17-20).

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