For the last several weeks, commodity markets, particularly energy, grains and metals, have been soaring on fears that the Russia-Ukraine war and related sanctions could create a supply shortfall in resource markets. This week, that sentiment appears to have been flipped on its head with new COVID lockdowns in China increasing fears of a demand shortfall.
This morning, WTI and Brent Crude oil are both trading back under $100.00/bbl with declines of 7.0% to 7.75%. Gasoline is down 5.75% and Natural Gas is down 2.5% as we near the end of home heating season. In metals action, Platinum has plunged 3.4%, while copper is down 1.1%, silver is down 1.9% and gold is increasingly falling away from $2,000/oz with a 4.7% drop. Chinese stock markets have been crushed for a second straight day on this turn of evens with Hong Kong nosediving 5.7% and Shanghai sliding 5.0%.
Continued fighting and continued peace talks have had a mixed effect on sentiment in Europe today. The Euro and Pound are both up about 0.5% today but the Dax is down 1.1% and the FTSE is down 0.8%. Coming off another day in the US that showed early promise but finished with US indices flat (Dow Industrials) to down 2.0% (NASDAQ), US index futures are trading flat (Dow) to up 0.4% (NASDAQ).
There have been a few economic reports for investors to digest while waiting for tomorrow’ Fed meeting and projections. US producer prices accelerated to 10.0% over year from a 9.7% growth rate last month, indicating inflation pressures continue to build. A disappointing US Empire State Manufacturing Index (-11.8 vs street 7.0) adds to the conversation about a possible stagflation problem. Canadian housing starts rebounded in February to 247K annualized up from 230K a month earlier and above the 238K street estimate. Positive retail sales (6.7% vs street 3.0%) and industrial production (7.5% vs street 3.9%) numbers out of China were overshadowed and overtaken by more recent events.
SIA Wealth Market Outlook Webinar Thursday, March 17th 2:00 pm EDT
Please join us on Thursday, March 17 @ 12pm MT / 2pm ET for our Market Outlook Webinar with Portfolio Managers Paul Vendrinsky and Kyle Wilson, plus Colin Cieszynski, Chief Market Strategist. We will be discussing risk management in uncertain markets, recent changes to cash allocations in SIA Wealth managed portfolios, and answering questions from advisors and media related to inflation, monetary policy, the Canadian Dollar, oil and more.
The link to register for the webinar: https://attendee.gotowebinar.com/register/8259236000684075021
After registering, you will receive a confirmation email containing information about joining the webinar. A replay will be available and sent to all registrants after the webinar.