Morning Minutes

China Contagion, Canada Election, and Central Bank Meetings

Share:

Facebook
Twitter
LinkedIn
Email
Print

Weekend business news has been dominated by financial problems at Evergrande, one of China’s largest real estate companies, who is struggling with over $300 billion in debt and appears close to missing an interest payment. Fears that this could potentially ignite a wider financial crisis have been weighing on world markets to start the new trading week.

In Asia Pacific, trading, Hong Kong plunged 3.3% while Sydney slid 2.1%. In Europe today, the Dax is down 2.3% while the FTSE has fallen 1.6%. US index futures are down 1.2% to 1.6% this morning with Dow futures down over 500 points at the moment. Commodities are also under pressure today with copper crashing down over 2.0% and WTI Crude Oil dropping 1.8%.

Capital has quickly started to move back into defensive havens. The US Dollar is up about 0.5% against the Canadian Dollar, Australian Dollar and British Pound. Gold and the Japanese Yen are even stronger, gaining 0.3% and 0.4% respectively against the US Dollar.

Canada’s federal election is today with results due overnight but possibly dragging into tomorrow depending on the impact of mail in-ballots. Weekend polls have been showing a very close race between the Liberals and the Conservatives with another minority government looking like the most likely outcome. Although specific sectors like energy and real estate may be impacted by the results, it would likely take a major surprise to otherwise upset the broader market. Note that Germany’s election is next Monday which could have an increasing impact on European trading as the week progresses.

It’s a busy week for central bank meetings starting including the Peoples Bank of China and the Bank of Japan Tuesday night, the Federal Reserve Board Wednesday afternoon, and the Bank of England Thursday morning. The only significant economic numbers of note are flash manufacturing PMI for September and Canada retail sales for July on Thursday morning.

Before the weekend, investors had been looking to the central bank meetings for talk of potential tapering as economies recover. With Evergrande coming to the forefront, the tone of the meetings may shift toward crisis management and averting a contagion or a financial crisis, which could potentially provide a reason/excuse for central banks meeting this week to remain dovish.  

New Video: SIA Wealth September Webinar Replay

A replay of the SIA Wealth Market Outlook Webinar with Colin Cieszynski – Chief Market Strategist, answering the most asked questions we have received from advisors over the past month, is now available.

YouTube Version: https://www.youtube.com/watch?v=n6m8ww_32aE

Subscribe to the Morning Minutes:

Today's earnings reports and market activity, delivered right to your inbox.

Colin Cieszynski, Chief Market Strategist

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

Read More

Legal and Regulatory Disclosures

Terms and Conditions:
This information is for Investment Advisors only. The website is for informational purposes only and is not intended to provide a complete description of SIA Wealth Management’s products or services. Past performance is not indicative of future results. It should not be construed as investment advice or relied upon in making an investment decision. Products and services of SIA Wealth Management are only offered in jurisdictions where they may be lawfully offered for sale. The information contained in this Website does not constitute an offer or solicitation by anyone to buy or sell any investment fund or other product, service or information to anyone in any jurisdiction in which an offer or solicitation is not authorized or cannot be legally made or to any person to whom it is unlawful to make an offer of solicitation. All products and services are subject to the terms of each and every applicable agreement. It is important to note that not all products, services and information are available in all jurisdictions outside Canada.

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. SIA Wealth Management Inc. 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.

INTERNET EXPLORER NOTICE