Morning Minutes

Markets Remain Mixed as Earnings Season Resumes and IMF Updates Forecasts

January 26, 2021

At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

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

For the second day in a row action across world stock markets has been mixed. Overseas markets have reversed course with European indices clawing back Monday’s losses led by a 2.0% gain in the Dax. Asia Pacific markets gave back much of Monday’s gains led by a 2.5% drop for the Hang Seng. US index futures appear indecisive this morning with Dow Futures up 0.25%. S&P 500 and NASDAQ futures are flat as they digest yesterday’s record closing highs.

Energy and metals are mixed again today. Natural gas is up 2.0% while WTI crude oil is up 0.3% as energy markets rebound. Metals, however, are uneven today with copper falling 0.6%, while gold is flat and silver is up 0.5%.

Earnings from big cap companies are in the spotlight again today. General Electric is up 9.1% in premarket action after sales and cash flow beat expectations, offsetting a slight earnings miss. Credit card provider American Express beat EPS expectations ($1.76 vs street $1.31) with management noting that as new lockdowns took hold, online spending increased but spending on entertainment and travel decreased. Other senior companies beating the street on earnings today include: 3M ($2.38 vs street $2.05), Johnson & Johnson ($1.86 vs street $1.82), and Verizon ($1.21 vs street $1.17). In other news, Beyond Meat is up 15.9% in premarket action after announcing a new partnership with PepsiCo to develop plant-based beverages and snacks.

Earnings season kicks off in Canada this afternoon with Canadian National reporting, followed by fellow railroad Canadian Pacific tomorrow. US headliners this afternoon include: Microsoft and Starbucks, followed by Boeing tomorrow morning.

The International Monetary Fund has updated its forecasts for 2021, revising its world GDP growth forecast upward for this year to 5.5% from 5.2%, and noting it expects world GDP to grow by another 4.2% in 2022 as the rollout of vaccines enable economies around the world to reopen. The agency noted that growth could be quite uneven between countries and regions. For example, it raised its US 2021 GDP growth forecast to 5.1% from 3.1% but cut its EU forecast to 4.2% from 5.2%.

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

Morning Minutes

Mixed Markets Kick off A Busy Week For Earnings

January 25, 2020

At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

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

The last trading week in January is off to a mixed start as investors await a number of potentially significant economic and earnings developments due in the coming days. US index futures are mixed with NASDAQ futures up 0.8% and Dow futures down 0.5%. Overseas, European markets are under pressure with London, Frankfurt, Milan and Paris all dropping 1.1%-1.7%. Asia Pacific markets, on the other hand, were up sharply overnight led by gains of 2.4% for Hong Kong, 2.1% for Seoul and 0.7% for Tokyo. Energy and metals markets are mixed today Natural gas is on the rebound with a 3.3% gain, while WTI crude oil is flat. Copper is down 0.2%, while gold and silver are up slightly. Currencies and bonds are quiet today.

Although it’s a light day for corporate and economic news, there have been some explosive pre-market rallies in stocks that had been laggards until recently such as Blackberry up 39.5%, Gamestop up 48.6%, both continuing rallies from last week. AMC Entertainment (movie theatres) is up 36.7% premarket after raising $917 million in new debt and equity financing to keep the company afloat.

The first half of this week is very quiet for economic news but the back half gets busier. This week’s main event is Wednesday’s Fed meeting and monetary policy decision. No changes in interest rates or asset purchases are expected at this time, but investors may look to the statement and press conference for hints on whether the Fed is more focused on short-term lockdown slowdown risks/support, or longer-term recovery potential, how committed the central bank is to providing more stimulus if needed and how closely the Fed’s intentions align with the incoming Biden Administration, particularly Treasury Secretary Yellen, a former Fed Chair.

Today is relatively quiet for earnings but the rest of the week makes up for it in what feels like two weeks of big cap reports crammed into four days. US headliners this week come from Energy, Technology, Industrials, and Consumer sectors such as: Microsoft and General Electric on Tuesday, Apple, Boeing, Facebook and Tesla on Wednesday, Visa, Mastercard and McDonalds on Thursday, wrapping up with Chevron and Caterpillar on Friday. Earnings season also kicks off in Canada this week led by Canadian National Railway on Tuesday, Canadian Pacific Railway on Wednesday, and Rogers Communications on Thursday

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

Morning Minutes

Stocks Slide As Flash PMI Numbers Reflect Lockdown Drag on Economies

January 22, 2021

At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

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

Despite the general tone of news flow remaining positive, stock markets around the world are pulling back ahead of the weekend. Part of this may be a shift in sentiment from anticipation to realization now that the Biden Inauguration is over, US politicians are getting down to work and earnings season is underway.

US index futures are all down about 0.7% with Dow futures down about 240 points coming off of an essentially flat Thursday. NASDAQ futures are down 0.6% erasing yesterday’s 0.5% gain. Major European indices are down across the board with Milan falling 1.9%, Frankfurt down 0.6% and London losing 0.8%.

 

The ongoing tug of war between concerns about the negative impact of near-term lockdowns and hopes for a long-term recovery as vaccines roll out appears to have tipped to the bearish side for the moment, amid reports of delays on vaccine shipments and flash PMI reports. The first, early look at the January economy for Europe (Manufacturing 50.8 vs street 50.3, Service 47.5 vs street 47.6) split with manufacturing near the 50.0 line and services below 50 in contraction territory. Results from the UK were similar and came in below expectations, with services particularly disappointing (Manufacturing 52.9 vs street 54.0, Services 38.8 vs street 45.0).

US flash PMI reports are due at 9:45 am today with the street expecting both Manufacturing (street 56.5 vs previous 57.1) and Services (street 53.8 vs previous 54.8) to show some slowing but also to remain above 50 in expansion territory. Canadian retail sales beat expectations but the report was for November, before the latest round of lockdowns really took hold.

Amid soft flash PMI reports and bulls taking a day off, commodities are trading lower this morning with WTI crude oil down 3.1%, natural gas down another 1.9% and copper falling 2.2%. This US dollar is on the rebound this morning, knocking gold and silver down 1.5% and 2.6% respectively.

Several companies are trading down in premarket action today despite releasing positive earnings reports, suggesting that following several months of gains, some investors may be looking to take profits against news. Today’s headliners include: IBM (down 8.2%, premarket EPS $2.07 vs street $1.79), Intel (down 4.8% premarket,  EPS $1.52 vs street $1.10, 5% dividend increase), Seagate Technology (down 4.5% premarket, EPS $1.29 vs street $1.13), and railroad CSX (down 2.2% premarket, EPS $1.04 vs street $1.01). Canada’s Sierra Wireless is up 8.7% in US premarket action after announcing the start of a leadership transition with its current President and CEO planning to step down at the end of June.

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

Morning Minutes

Executive Orders, Earnings Reports and Central Banks in Focus

January 21, 2020

At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

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

US index futures are once again pointing toward a moderately positive open for the North American trading day with gains of 0.2% to 0.4%. Meanwhile, European indices are essentially steady trading between -0.2% and +0.2%. Commodities are also mixed today with copper climbing 0.7% but WTI crude oil sliding 0.3% and natural gas continuing this weeks’ plunge with a 2.6% drop.

The US dollar continues to weaken relative to the Euro and Pound, the Loonie is steady consolidating yesterday’s gains, and gold is still refusing to take advantage of US Dollar weakness indicating that investor confidence remains high and interest in haven assets remains low.  Three central bank meetings (Bank of Canada, European Central Bank and the Bank of Japan) over the last 24 hours all had similar messaging. Although the short-term outlook for their economies remains challenging amid the latest round of lockdowns, central bankers are also seeing the potential for recovery as the year progresses as vaccine rollouts accelerate and economies reopen. Because of this while central bankers remain committed to their current emergency stimulus programs (low interest rates and asset purchases), none seemed ready to hit the panic button and add more stimulus.

Its Day 2 of the Biden Administration, and the focus for new executive orders appears to be on fighting COVID with 10 new executive orders planned related to improving vaccine distribution and accelerating manufacturing of masks, and medical equipment. Meanwhile over in the Senate, the focus is on confirmation hearings for the Biden cabinet with one approval done and a vote on Treasury Secretary nominee Janet Yellen expected tomorrow.

In US economic news, initial jobless claims (900K vs street 910K), continuing claims (5.0M vs street 5.4M), and housing starts (1.66M vs street 1.56M), and the Philadelphia Fed manufacturing survey (26.5 vs street 12.0) all exceeded expectations.

Earnings continue to roll out this morning headlined by strong results from insurer Travelers ($4.91 vs street $3.18), and worse than expected losses from United Airlines (-$7.00 vs street -$6.60). After the close today, results are due from IBM, Intel and Union Pacific.

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

Morning Minutes

Inauguration Day, Bank of Canada, and Netflix Earnings

January 20, 2021

At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

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

A busy day for political and monetary events finds stocks and commodities around the world trading higher again this morning. US index futures are up 0.1% to 0.9% with the NASDAQ leading the charge. Overseas, the FTSE is flat (but the Pound is up 0.25% against the US Dollar and 0.5% against the Euro), the Dax is up 0.4% and the Hang Seng is up 1.0%. WTI Crude Oil is up 0.8%, but natural gas is down another 3.5%. Metals (gold, silver and copper) are all holding steady so far today.

Today’s main event is the inauguration of Joe Biden as the 46th US President at noon EST. Following the ceremony and speech, Biden is expected to hit the ground running and issue a number of executive orders related to climate (rejoining the Paris Accord and cancelling the Keystone XL pipeline), immigration, and other areas, with more expected over the next several days. US stocks have come a long way since election night, and with several major US indices hitting new all-time highs since the start of this year, significant positive expectations have been built into the market for the new administration.

The Bank of Canada is meeting this morning with a decision and statement due at 10:00 am EST. No changes to interest rates or asset purchases are expected at this time but investors may still look to the statement for clues about the state of the Canadian economy or hints of whether the bank is planning additional support measures to offset the negative economic impact of increased lockdowns and curfews.

Earnings season continues to ramp up with a number of results out this morning, headlined by Netflix which is up 13.1% in premarket trading after announcing quarterly numbers. Results were mixed with sales beating expectations ($6.64B vs street $6.62B) but EPS falling short of analyst estimates ($1.19 vs street $1.39). It appears investors have decided to focus on the news that the company topped 200 million subscribers for the first time and talk from management about moving toward becoming free cash flow positive plus the potential for share buybacks in the coming year.

Other senior US companies reporting results today include: Procter & Gamble ($1.64 vs street $1.51) and UnitedHealth ($2.52 vs street $2.41). Alcoa and United Airlines are scheduled to report after the close this afternoon.

 

SIA Wealth In The Media

Chief Market Strategist Colin Cieszynski recently appeared on BNN Bloomberg where he discussed relative strength in North American markets, and the potential impact of the incoming Biden Administration on stocks and markets.

Biden blocking the Keystone XL throws a ‘monkey wrench’ into the energy sector’s recovery: Market strategist

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

Morning Minutes

Post Title

Month Day, Year

At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

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

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Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

Morning Minutes

Stocks Climb As Earnings Season Resumes

January 19, 2020

At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

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

US investors have returned from their long weekend in a positive mood. US markets appear poised to shrug off Friday’s losses with index futures up 0.7% to 0.8%. European indices are flat this morning but Asia Pacific markets climbed overnight with the Hang Seng soaring 2.7% and the Nikkei gaining 1.4%.

This morning has been the first chance for investors to respond to weekend reports that following tomorrow’s inauguration, President-elect Joe Biden is planning a number of executive orders and directives. Today investors may hear more about the incoming administration’s fiscal stimulus plans from Treasury Secretary nominee Janet Yellen at her confirmation hearing with the Senate Finance Committee.

Earnings season is back underway in the US this morning. A strong stock market has continued to help investment banking/trading/wealth management operations at big banks propelling Goldman Sachs ($12.08 vs street $7.47) and Bank of America ($0.59 vs street $0.55) to better than expected results. Regional bank Comerica also surprised to the upside driven by a rebound in traditional banking activity ($1.49 vs street $1.19). A rebound in energy prices appears to be helping oilfield activity as driller Halliburton beat the street ($0.18 vs street $0.15). Netflix is scheduled to report results after market close today.

In commodity action, natural gas is getting hammered again, falling another 2.5% as winter temperatures in consuming regions remain above seasonal. Crude oil is climbing with Brent up 1.2% and WTI up 0.4%. Copper is up 1.3%. The US Dollar is in retreat again, perhaps on speculation that more US stimulus could force the Fed to step up asset purchases. The greenback is down 0.2% against Gold, the British Pound and the Canadian Dollar, and down 1.0% against Silver and Platinum.

 

SIA Wealth In The Media

Chief Market Strategist Colin Cieszynski recently appeared on BNN Bloomberg where he discussed relative strength in North American markets, and the potential impact of the incoming Biden Administration on stocks and markets.

Biden blocking the Keystone XL throws a ‘monkey wrench’ into the energy sector’s recovery: Market strategist

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

Morning Minutes

Energy In Focus as Biden Inauguration Approaches

January 18, 2020

At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

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

With US markets closed today for Martin Luther King Day, stock markets around the world have been holding steady overnight, as is common on US holidays. The rest of this week, however, has the potential to be quite active with a number of political and economic developments scheduled.

On Wednesday, Joe Biden is scheduled to be inaugurated as the 46th President of the United States. Over the weekend, reports have been coming out that suggest he is planning to kick off his term with a number of Presidential orders and directives related to the economy, immigration, trade and other areas for dealing with COVID and starting to unwind some Trump-era policies.

In terms of the potential impact on today’s trading in the open Canadian market, the most significant report has been that Biden intends to block the Keystone XL pipeline, picking up where he left off as VP in the Obama Administration. This could potentially impact the price differential between the US WTI and Western Canadian Select benchmark crude oil prices and through that, potentially impact sentiment toward energy stocks. So far today, WTI is down 0.4% while WCS is down 2.5%. Both of those declines pale in comparison, however, to the 5.0% plunge underway in the natural gas price as temperatures remain unseasonably warm in some consuming regions, depressing peak winter heating season demand.

In other news this week, there are a number of central bank meetings planned in Canada, Europe and Japan. The Bank of Canada is expected to hold interest rates steady but investors may look for hints on whether the bank has any plans to increase stimulus with lockdowns deepening and being extended across the country. The European Central Bank and Bank of Japan added stimulus at their last meetings in December so they appear unlikely to do so again this time.

Earnings season continues to ramp up this week with more results from US airlines plus national and regional banks. Reports are also expected to start coming in from railroads, technology, oilfield services, industrials and other sectors. Headliners include: Bank of America, Goldman Sachs and Halliburton on Tuesday, P&G and UnitedHealth on Wednesday, Intel, IBM, Travelers Insurance, and Union Pacific on Thursday, wrapping up with Honeywell and Schlumberger on Friday.

The economic data calendar is light this week until Friday when Flash Manufacturing and Flash Service PMI reports come out from the US, UK, Germany and others bringing the first peek at January economic conditions, plus Canadian retail sales.

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

Morning Minutes

Stocks Sink Amid New US Stimulus, Bank Earnings and Retail Sales                                                                                                                                          

January 15, 2020

At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

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

Its the first day of earnings season, the Friday before a long weekend and monthly options expiry in the US today and amid a flurry of news announcements, US index futures are sliding 0.3%-0.4% this morning, adding to yesterday’s 0.1% to 0.4% declines. European markets are also in the red today with the Dax down 0.9% and the FTSE falling 0.8%.

Last night President-Elect Biden outlined his fiscal stimulus proposal for dealing with the impact of the current wave of COVID and lockdowns including a vaccination plan and a $1.9 Trillion fiscal stimulus program which includes a $1,400 payment to affected individuals (bringing the recent total up to the $2,000 some politicians had been looking for in the December negotiations, support for states and education, extending the ban on evictions, and an increase in the minimum wage to $15 per hour. It remains to be seen how much of this will pass or be negotiated away in the coming weeks even with the Democrats controlling both the White house and Congress, particularly with an economic rebuilding plan reportedly coming next month.

US earnings season has kicked off this morning with results from 3 big banks. Citigroup beat the street on EPS ($2.08 vs street $1.34) but increased its credit loss provision to $1.5B from $0.43B last quarter. JPMorgan also beat expectations on earnings ($3.79 vs street $2.62), which were propelled by a net $1.9B or $0.72 per share release of cash from credit (loan loss) reserves, and record results from trading operations. Wells Fargo exceeded street earnings expectations ($0.64 vs street $0.58).

Action in precious metals, however, suggests that today’s action is more of a common trading correction and not a bearish change in sentiment. Gold and silver are down 0.25% and 1.80% on a day when their natural adversary, the US Dollar is also down, suggesting that capital is still shying away from defensive havens. That being said, new lockdowns overseas, particularly in China, does appear to be dragging on commodity prices this morning with both Copper and WTI Crude Oil falling about 1.0%.

Confirming anecdotal reports from struggling US retailers from the last few days, US retail sales declined 0.7% in December which was worse than the flat reading the street had expected, while November retail sales were revised downward to a 1.4% drop from a 1.1% decline. The Empire State Manufacturing Index also came in below expectations (3.5 vs street 6.0 and previous 4.9). These misses, combined with the payroll declines announced last week confirm that the latest round of lockdowns has started to take its toll on the US economy.

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

Morning Minutes

Steady Stocks Await Biden Speech and Earnings Season

January 14, 2021

At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

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

US stocks remain in a holding pattern ahead of tomorrow’s kickoff to earnings season. US index futures are flat to up 0.3%, similar to yesterday’s flat to 0.4% return. Overseas markets were also mildly positive with the Dax up 0.2%, the FTSE up 0.5% and the Hang Seng up 0.9%. Energy and metals trading is also quiet so far today with Gold down 0.7%, Copper up 0.6% and WTI crude oil down 0.6%.

Investors appear to be sitting on their hands awaiting a flurry of developments over the next 24 hours. This evening, President-Elect Joe Biden is expected to outline his plans for dealing with the current wave or COVID 19 including vaccinations, fiscal stimulus and possibly other initiatives. This afternoon, Fed Chair Powell and three other FOMC members are set to speak which investors may look to for hints of whether the central bank is planning to bring in additional stimulus to deal with the current round of lockdowns.

Ahead of tomorrow’s formal kickoff of earnings season, there are a number of corporate reports out today. Delta Air Lines reported a slightly worse than expected loss (-$2.53 vs street -$2.50) but mentioned that it cut its cash burn rate by about 50% in the latest quarter. Retailer Nordstrom announced a holiday season same store sales plunge of 22% from a year ago indicating discretionary retailers, particularly in clothing, continue to struggle, but also that consumers continue to shift spending online with a 54% increase in online sales over a year ago.

In economic news, China announced a stronger than expected trade surplus ($78.1B vs street $72.3B) boosted by higher than expected export growth (18.1% vs street 15.0%). Imports were also higher than expected (6.5% vs street 5.0%), a positive indicator of growing demand for commodities.

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

Morning Minutes

Stocks Hold Steady on Mixed US Retailer News

January 13, 2020

At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

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

Stock markets around the world have been quiet overnight as investors await a number of developments scheduled for later in the week including China trade data tonight, FOMC Chair Powell and President-Elect Biden speaking Thursday and the kickoff to earnings season plus retail sales numbers for the US and China on Friday. This afternoon, the Fed releases its Beige Book regional economic report and two FOMC members are set to speak, Brainard and Clarida, of which the former could be particularly significant considering her long-established ties to the incoming administration.

US index futures are down 0.2%-0.4% this morning, essentially giving back yesterday’s US index gains of 0.0%-0.4%. Major European indices are flat to down 0.3% today after taking a handoff from essentially flat Asia Pacific trading.

While investors await the start of earnings season, holiday season sales from retailers have attracted some attention. This morning’s numbers highlight the growing divide between discretionary versus staples/online purchases. Target announced that its same store holiday season sales were up 17.2% over year, including large increases in curbside pickup and delivery sales. On the other hand, apparel and lifestyle retailer Urban Outfitters is down 9.3% in premarket trading after announcing that its holiday season sales were down over 9% from a year ago.

WTI crude oil is up 0.4% this morning after weekly API US oil inventories fell by 5.8 mmbbls last week, more than the previous week’s 1.6 mmbbl drawdown. US DOE oil inventories are due at 10:30 am EST, with the street expecting a 2.2 mmbbl drawdown, less than the 8.0 mmbbl decline of the previous week. Natural gas, meanwhile, is up 2.0% as temperatures fall in consuming regions. Metals are mixed today with Gold up 0.5%, Copper up 0.3% but Silver sliding 0.4%.

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.