Morning Minutes 9/8/2020

Morning Minutes

NASDAQ Correction Deepens, Commodities Retreat

September 8, 2020

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

North American traders have returned from the Labour Day weekend in a sour mood. Overseas trading was mixed overnight with Asia Pacific markets rising, led by a 1.0% gain for Sydney and a 0.8% advance for Tokyo, but European indices falling, led by a 1.3% decline for the Dax.

In the absence of any significant earnings or economic news, US index futures have continued downward, adding to Friday’s declines. NASDAQ futures are leading the way lower, plunging 3.1% while S&P futures are down 1.4% and Dow futures are down 0.9%. Interestingly, the most significant development weighing on US sentiment today appears to be that Tesla (down 15.3% premarket) was left out in the cold, excluded from the list of companies being added to the S&P 500 later this month.

Commodities are also under pressure to start the week. WTI crude oil is down 5.9% and has plunged back under $40.00/bbl while Brent Crude is down 3.75% holding just above $40.00. Copper is also down today falling 1.0%. These declines could be a delayed reaction to Chinese trade numbers which showed stronger than expected exports (9.5% vs street 7.1%) but weaker than expected imports (-2.1% vs street 0.1%).  The US Dollar is climbing this morning, rising 0.5% against CAD, 1.0% against GBP, and 0.6% against gold today.

This week’s economic spotlight is on central banks with the Bank of Canada meeting on Wednesday and the European Central Bank meeting on Thursday. No changes to interest rates or asset purchases are expected, but investors may look for statements related to the health and outlook for their economies.

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