Morning Minutes 1/8/2020

Morning Minutes

Stocks and Commodities Climb Despite December Job Losses

January 8, 2020

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

US index futures are clinging to small gains of 0.3%-0.5% this morning and still building on this week’s positive momentum which saw the S&P 500 climb 1.5% and the NASDAQ Composite rally 2.5% yesterday. Overseas markets have continued to soar with the Nikkei rallying 2.4%, the Hang Seng gaining 1.2%, the Dax rising 0.7%. The FTSE flat, held back by a strengthening British Pound.

Confirming Wednesday’s disappointing ADP private sector payrolls report, US nonfarm payrolls dropped by 140K in December which was significantly worse than the 71K increase the street had been expecting. Part of this shortfall can be explained by an upward revision of November payroll growth to 336K from 245K but it still indicates that the new round of lockdowns has started to have a negative impact on employment. Canadian employment fell by 62K in December, wiping out November’s 62K increase and coming in worse than the 27K decline the street had been expecting.

Commodity, currency and interest rate action also suggest that the soft payroll numbers haven’t put a dent in investor confidence. Defensive precious metals Goldl and Silver remain under pressure, falling 1.5% and 2.1% respectively. Meanwhile, crude oil continues to climb. WTI and Brent continue to put $50.00/bbl and $55.00/bbl respectively in their rear-view mirror with gains of about 1.5% for both contracts today. Copper is up 0.3% this morning.  The US 10-year treasury note yield continues to rise, approaching 1.10%.

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