Morning Minutes 9/28/2020

Stocks Rebound as Quarter-End Approaches

September 28, 2020

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

Monday finds US index futures pointing toward opening gains of 1.40% to 1.90% and building on Friday’s advances of 1.35% to 2.60% with the NASDAQ leading the charge in both cases. There hasn’t been any specific news to drive the rally which appears to be related to building on overseas momentum, the September market correction apparently having run its course and perhaps some window dressing by institutional investors ahead of quarter-end on Wednesday.

Across the pond, today’s resumption of UK-EU trade talks has sparked a 1.1% gain for the British Pound against the US Dollar (Euro is steady against the Dollar and down against the Pound). European indices are also on the move upward today with the FTSE up 1.60% and the Dax up 3.00%.

Commodities, on the other hand, have been spinning their wheels with crude oil flat and copper up 0.3%. This suggests that recent equity gains may be related more to shifts in investor sentiment than changes in the world economic outlook. Gold is down slightly while silver is flat as precious metals digest improving investor confidence.

The week ahead has the potential for significant political and economic developments while the corporate calendar remains quiet. The first US Presidential Debate is Tuesday evening, potentially increasing attention on the US election campaign and the Supreme Court nomination battle. On the economic side, this week is headlined by US ADP Payrolls on Wednesday, Manufacturing PMI reports from around the world on Thursday and US Nonfarm Payrolls on Friday.

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