October 7, 2020
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Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428
US equity markets had been marching steadily higher yesterday responding to calls from Fed Chair Powell for more fiscal support for the economy to work hand-in-hand with monetary support, warnings that a lack of support could slow the recovery and suggesting that the risk of not enough stimulus was higher than the risk of too much stimulus. In the last two hours of Tuesday trading, however, the bandwagon hit a pothole after President Trump announced that he has called off stimulus package negotiations until after the election, which send US indices to losses of 1.4% to 1.6% on the day.
This morning finds US index futures on the rebound after President Trump indicated that he is willing to support specific measures immediately including a new set of $1,200 cheques for individuals, plus support packages for the airline sector and small businesses. Currently, the three main US index futures contracts are all trading up about 0.8% approximately clawing back about half of yesterdayâ€™s losses.
In earnings news, Clothier Levi Strauss is up 13.1% in premarket trading today after reporting a quarterly profit of $0.07, significantly better than the $0.22 per share loss analysts had feared. Similarly, sales, although down 27% over year, were not as bad as thought ($1.066B vs street 822M), boosted by a 52% increase in online sales. Management suggested that next quarterâ€™s sales decline could shrink to -14% to -15% over year if business conditions donâ€™t worsen again.
Itâ€™s a light day for economic news. Canada Ivey PMI is due at 10:00 am EDT (previous 64.6). Minutes of the last Fed meeting are due at 2:00 pm but may be dated in the wake of Chair Powellâ€™s recent comments. Tonight the two US Vice-Presidential candidates are debating each other at 9:00 pm EDT.
SIA Wealth Update Webinar Wednesday October 7, 2:00 pm EDT
Join SIA Wealth Management for an update on the current market, their outlook for the rest of 2020 and how that relates to SIA Wealth Management portfolios. Webinar audio will be available through computer VoIP or dial in using your phone.
Registration information and replays can be found in the webinar section of the SIA Wealth Website
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