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Fed and European Uncertainty Overhang Markets

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Overseas markets have reflected an erosion of confidence overnight with the Hang Seng falling 1.0%, the FTSE sliding 0.7% and the Dax dipping 0.4%. Sentiment has turned bearish in Europe as Austria reimposing lockdowns has reminded investors that COVID waves can still disrupt the world economy. Meanwhile dovish comments from ECB President Lagarde downplaying inflation and committing to ongoing stimulus were taken by investors as a sign that the continental economy continues to struggle.

North America is not immune from uncertainty either. US President Biden is expected to announce in the coming days whether he plans to keep Jerome Powell on as Fed chair for another term or replace him with the historically more dovish Fed governor Lael Brainard, which may also be adding to market uncertainty. In Canada the impact of BC mudslides which have cut off the key Port of Vancouver from most of the country remains unclear.    

Signs of inflation still abound but retail sales continue to improve. Canadian new house prices were up 11.5% over year last month, up from and 11.3% growth rate in September. Retail sales reports for Canada (-0.6% over month vs street -1.7%) and the UK (0.8% over month vs street 0.5%) both came in better than expected.

With little economic or corporate news stateside, US index futures are indecisive and adrift, varying between a 0.7% decline for Dow Futures and a 0.4% gain for index futures. This continues yesterday’s split performance for US indices which varied between a 0.5% decline for the Russell 2000, and a 0.5% gain for the NASDAQ.

Commodity and currency trading action is also mixed today as investors struggle with the implications of current economic and political uncertainties. WTI crude oil is taking it on the chin, plunging 3.1% overnight, but copper is up 0.7%. Gold is up 0.1%, while Bitcoin is down another 2.1%.

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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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