Morning Minutes

Fed and European Uncertainty Overhang Markets



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%.

New Video: SIA Wealth November Webinar Replay

A replay of the SIA Wealth Market Outlook Webinar with Colin Cieszynski – Chief Market Strategist, answering the most asked questions we have received from advisors over the past month, and premiering our latest video – Competition, is now available.

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Colin Cieszynski, Chief Market Strategist

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

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