Morning Minutes

Crude Oil Climbs To Its Highest Level Since 2014!




SIA Wealth Morning Minutes: Crude Oil Climbs To Its Highest Level Since 2014!

Crude oil contracts are breaking out to multi-year highs this morning. US crude oil, for example, has blasted through its 2018 high near $77.50/bbl and has carried on up toward $78.50/bbl up 1.1% on the day and trading at its highest level since 2014, while Brent Crude is up 1.4%. Natural Gas also continues to soar in the wake of hurricane related production disruptions and with investors looking ahead to home heating season which starts November 1. The natural gas price has soared another 4.6% this morning and is trading above $6.00/mmbtu for the first time since December of 2008.

In earnings news today, Pepsico may have provided investors with a clear indication of what to potentially expect this earnings season. Despite beating the street on earnings ($1.79 vs street $1.73) and raising full year earnings guidance, the shares are flat in premarket trading. It appears based on this action that expectations for strong numbers may have already been baked into the share price. Also, investor enthusiasm may have been dampened by management comments about facing supply chain issues and having to manage rising inflation pressures as the costs of wages, transportation and raw materials continue to climb.

Last week, morning attempts by US markets to bounce back tended to fade as the trading day progressed. Today we’ll get a chance to see if anything has changed, if the bulls can muster up more strength (“buying the dip”) or if bears are still prepared to distribute into bounces (“selling the rally”). US index futures are up 0.4%-0.5% as markets try to claw back yesterday’s losses of 0.9% for the Dow, 1.3% for the S&P 500 and 2.1% for the NASDAQ. Overseas, the Dax is up 0.4% and the FTSE is up 0.6%, while the Nikkei tumbled another 2.0%.

In economic news, Canada posted a stronger than expected trade surplus for August ($1.9B vs street $0.3B) which could be benefitting from rising oil and gas prices. The US trade balance was worse than expected (-$73.3B vs street -$70.5B). Service PMI reports out of Europe this morning were mainly in the mid-50s and slightly above expectations, a sign of moderate economic growth. US ISM Non-Manufacturing numbers are due at 10:00 am EDT this morning with the street expecting 60.0 for the headline number, 79.3 for prices paid and 62.3 for new orders. Tomorrow morning brings US ADP payrolls at 8:15 am EDT (street 428K vs previous 374K).

SIA Wealth In The Media:

Chief Market Strategist Colin Cieszynski appeared as Guest Co-host on BNN Bloomberg’s The Street program this morning where he discussed the upcoming earnings season, tactical investing and relative strength.

Pepsi could be the canary in the coal mine of what we might expect for Q3 earnings: Colin Cieszynski

Colin Cieszynski, chief market strategist, SIA Wealth Management joins BNN Bloomberg to provide his outlook for Q3 earnings. He says, “Going forward, although the economy is improving, the outlook for earnings might not be quite as strong, we might be going from a strong rebound phase into something more moderate.”

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Colin Cieszynski, Chief Market Strategist

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

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