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China Monetary Support, Positive Earnings, and Canada Jobs In Focus

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Stock markets in Europe and North America continue to bounce back from recent weakness this morning. The Dax and FTSE are up 1.0% and 0.9% respectively, while US index futures are up with gains varying between 0.1% for NASDAQ futures and 0.7% for Dow futures. In the UK today the NIESR agency posted a GDP estimate for the three months that ended in June well above expectations (4.8% vs street 2.6%).

Overnight, China stepped in with its first new monetary stimulus in over a year, cutting bank reserve requirements by 0.5%, freeing up approximately 1 trillion Yuan in bank capital for new lending to individuals and businesses. Commodities have responded positively to this news, particularly China-sensitive Copper, which is up 1.7%, while WTI crude oil is up 1.1%.

Clothier Levi Strauss reported strong results for its May quarter overnight with sales soaring ($1.28B vs street $1.21B and year-ago $0.49B) and earnings crushing expectations ($0.23 vs street $0.09). In what could be an early indicator of whether investors are prepared to pay for good news in the upcoming earnings season, Levi’s shares are up 3.3% in premarket trading.

Canada employment bounced back strongly in June as provinces reopened their economies to varying degrees A 230K increase in jobs in June offset nearly all of the lockdown declines in May (-68K) and April (-207K). The unemployment rate improved to 7.8% from 8.2% last month.  

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.

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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.

Colin Cieszynski, Chief Market Strategist
Market Commentary:

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

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