Morning Minutes 11/11/2020

Morning Minutes

Stocks Climb As Interest Rates Suggest Previous Panic May Be Fading

November 11, 2020

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

Stock markets around the world are trading higher again today for the most part as investors continue to anticipate an improving global economy following the positive COVID vaccine and treatment news from earlier in the week. NASDAQ futures are up 1.3% as it tries to claw back two days of losses to start the week including a 1.3% drop yesterday. Dow and S&P futures are up 0.6%-0.8%. Overseas, Europe is generally in the green with the Dax up 0.6% and the FTSE up 1.0%. Asia Pacific trading was mixed with the Nikkei rallying 1.8% but the Hang Seng sliding 0.3%.

The US Dollar is up against the Euro, Pound, Yen and Canadian Dollar today and appears to be getting a tailwind from rising traded US interest rates. In a sign that investors are starting to look past the COVID crisis toward an economic recovery, the 10-year traded US treasury note yield has climbed to 0.98%, clearing its June high to trade at its highest level since March and move to within striking distance of the 1.00% psychological hurdle. One currency which is even stronger today is the New Zealand Dollar which has rallied 0.6% against the greenback after the Reserve Bank of New Zealand held its benchmark interest rate at 0.25%, crushing street expectations of a possible move to negative rates.

Its a light day for economic and corporate news with banks and government offices closed for Remembrance Day in Canada and Veterans Day in the US. Lyft shares are up 5.7% in premarket action after sales beat expectations ($499M vs street $486M) and the company indicated ridership rebounded by 44% from the previous quarter. In Canada, Great Canadian Gaming has agreed to be acquired by Apollo Global Management for $3.3B or $39.00 per share, a 35% premium to yesterday’s close.

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