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Disappointing North American Employment Reports Dampen Sentiment

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Building on yesterday’s 1.00% to 1.25% gains for US indices, US index futures are up another 0.3% to 0.4% this morning amid a number of significant developments from many directions. On the government side, a new $1.9 Trillion US stimulus package continues to work its way through Congress. On the vaccine side, Johnson & Johnson is asking the FDA for accelerated emergency approval of its single-dose COVID vaccine after announcing positive clinical results recently. On the trading side, some brokerages, including RobinHood, have eased trading restrictions on some of the so-called Reddit stocks, such as GameStop. Positive sentiment has kept a tailwind behind commodities as well this morning. Natural gas is up 3.4% while WTI crude oil is up 0.9%. In metals trading, Copper, Silver and Platinum are all up between 1.00% and 1.30%, while gold is up 0.4%.

Indices remain in the green but have started to tumble slightly on today’s US employment news. Nonfarm payrolls increased by 49K in January, just below the 50K street estimate, but the December job loss was revised down to -227K from -140K. It’s possible that some investors may have been expecting a positive surprise following Wednesday’s strong ADP payrolls report. At 6.3%, the US unemployment rate came in better than the 6.7% rate the street had expected.

Canadian employment was hit really hard in January from lockdowns, nosediving for a second month in a row, this time by -213K, the worst month since April of 2020 and far worse than the 48K drop in jobs the street had been expecting. The Canadian employment rate increased to 9.4% from 8.8% last month.

Overnight earnings reports have been dominated by consumer products, technology and communications companies. Highlights include:  Lightspeed POS* (sales $57.6M vs street $50.2M), Ford ($0.34 vs street -$0.07), Pinterest ($0.43 vs street $0.32), Peloton* ($0.18 vs street $0.09), and Snap ($0.09 vs street $0.07)

*Shares of Lightspeed POS and Peloton are held in some portfolios managed by SIA Wealth Management.

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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