Morning Minutes 8/11/2020

Morning Minutes

Russia Vaccine Progress Sends Stocks Soaring and Gold Sinking

August 11, 2020

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

Investors have jumped on overnight reports that Russia has become the first country to register/approve a COVID-19 vaccine, igniting speculation that the global economic reopening could potentially accelerate in future.

Action in US index futures on this news has varied between a 0.2% decline for the NASDAQ and a 1.1%, 300-point rally for the Dow. In premarket action, sectors which had been hit particularly hard by lockdowns including airlines and cruise lines, have been climbing. Overseas, the Dax, CAD, FTSE (UK) and FTSE MIB (Italy) are up 2.3%-2.9%. Asia Pacific markets were mixed with Hong Kong climbing 2.1%, Tokyo rising 1.9% but Shanghai falling 1.1%.

Todays action in non-equity asset classes shows capital leaving defensive havens and suggesting that investor confidence returning. Gold is down 2.6% today trading back under $2,000/oz, while silver has plunged 4.6%. The US Dollar and US bonds have also been in retreat today with the 10-year treasury yield rising back above 0.6%, plus the Euro, Pound and Canadian Dollar posting gains of 0.3% to 0.5% against the greenback. Commodity action has been mixed with WTI crude oil climbing 1.75% and copper falling 0.3%.

There were a few earnings reports from Canada of note overnight. Fertilizer producer Nutrien beat EPS expectations ($1.45 vs street $1.37). Canada Goose’s results, were disappointing with sales ($18.8M vs street $50.3M) and EPS (-$0.25 vs street -$0.07) coming in below market expectations.

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