Morning Minutes 12/31/2020

Morning Minutes

2020 Ends Quietly For Markets Amid Positive PMI Reports

December 31, 2020

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

A quiet holiday week capping off a tumultuous year for world markets appears to be heading for a mixed finish today. US index futures are essentially flat this morning, consolidating yesterday’s small gains. Over in Europe, markets are drifting downward with the Dax down 0.3% and the FTSE down 0.9%, the latter possibly being impacted by another rally for Sterling, which is up 0.25% against the US Dollar.

Asia Pacific trading was mixed overnight with Shanghai soaring 1.7% and Hong Kong climbing 0.3% while Sydney stumbled to a 1.4% loss and Tokyo fell 0.4%. Chinese markets attracted positive attention from China’s monthly PMI reports which featured a stronger than expected Non-Manufacturing report (55.7 vs street 52.4 and previous 56.4) along with a steady Manufacturing report (51.9 vs street 52.0 and previous 52.1).

Manufacturing PMI reports kick off the new year on Monday. Yesterday’s Chicago PMI, a regional report which investors look to as a potential leading indicator for the national numbers, was stronger than expected (59.5 vs street 57.0 and previous 58.2). Weekly US unemployment data was better than expected with both initial claims   (787K vs street 803K) and continuing claims (5.21M vs street 5.39M) beating expectations.

Energy markets are mixed today with natural gas soaring 3.3% while WTI and Brent Crude oil are both down about 0.9%. In metals action, copper is down 0.7%, while gold and silver are both up about 0.2%.

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