Morning Minutes

Commodities Rally As China Reopens




With more investors returning from holidays, the new trading week is off to a positive start so far. Commodities have been particularly strong with WTI Crude Oil up 3.4%, Natural Gas up 3.2% and Copper up 1.9%. News over the weekend that China has reopened its borders to tourists for the first time in three years appears to have stoked speculation that previously depressed demand for resources in China could rebound as its economy reopens.  

Stock markets are also off to a strong start. US index futures are up 0.3%-0.4%, building on Friday’s US index gains of 2.1% to 2.5% which were ignited by stronger job growth and weakening wage inflation in both the US and Canada. Overseas, the Hang Seng gained 2.3% while the Dax is up 0.8% and the FTSE is flat. The US Dollar is soft this morning, enabling Gold, the Euro, the Pound and the Canadian Dollar to all gain about 0.5%.

It has been a quiet day for business news so far, but the week picks up as we move on. Tomorrow, speeches from Fed Chair Powell and Bank of Canada Governor Macklem may give some insight into what North American central bankers are thinking about the future of interest rates following Friday’s wage data. More inflation data is also on the way from China on Wednesday and the US on Thursday.

Earnings season kicks off on Friday with several major US banks scheduled to report results including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo, plus UnitedHealth, Delta Airlines and Blackrock. We are now into confession season and with the exception of Bed Bath and Beyond’s ongoing financial troubles, no notable companies took advantage of a quiet week last week to sneak out profit warnings. Today the focus has been on lululemon athletica, which is down 9.1% in premarket trading as investors focused more on management cutting profit margin guidance even though it also raised sales guidance.       

SIA Wealth In The Media:

Chief Market Strategist Colin Cieszynski appeared on BNN Bloomberg today where he spoke about a number of topics including gold, the US Dollar, and relative strength in market sectors.  

Defensive sectors like consumer staples and utilities have shown relative strength: Colin Cieszynski

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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