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Indices Climb Despite Storm Clouds for Video Games

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Coming off of a mixed to slightly lower Monday, US index futures have been bouncing back this morning with gains of 0.1% to 0.3%. Over in Europe, the FTSE is up 0.4% while the Dax is up 0.1%. Commodities are under pressure this morning with WTI crude oil down 1.1% and copper down 0.6%. Cryptocurrencies are also sliding today with Bitcoin down 2.8% and Ethereum down 4.9%. Gold is down 0.4%.

Sentiment continues to be impacted by the growing number of Covid Delta cases in the US, but the main action overnight has been in the video game sector. Rumblings out of China comparing online gaming to opium rattled the sector overnight on increased concerns that the sector may be next for Chinese government regulatory intervention. In premarket action, NetEase is down 7.7% while Tencent is down 6.1%. So far, North American video game stocks have not been as impacted with the worst being Take-Two with a 4.0% premarket decline.

A big week for economic news kicked off yesterday with manufacturing PMI reports from around the world. US manufacturing PMI disappointed slightly (59.5 vs street 60.9), while new orders (64.9 vs previous 66.0) and the prices paid inflation (85.7 vs previous 92.1) components eased back a bit. US construction spending was improved but not as much as investors had hoped (0.1% vs street 0.4% and previous -0.2%).

Canadian manufacturing PMI is due at 9:30 am today (previous 56.5). Tomorrow brings US ADP payrolls (street 695K) and services PMI reports from around the world, followed by a Bank of England meeting on Thursday. The week then wraps up with US nonfarm payrolls and Canada employment numbers on Friday.

We continue to move through the heart of earnings season this week. In the US, the tone has started to shift toward mid-cap and smaller companies. Highlights of results from overnight and this morning include: Marriott ($0.79 vs street $0.45), and Under Armour ($0.24 vs street $0.06).

Results continue to flood out from a number of different industries, but it is a particularly busy week for insurance companies Great West Life and Prudential report later today, followed by Manulife, Sun Life and MetLife tomorrow. Forest products are also in focus with Domtar and Cascades reporting Thursday followed by Interfor on Friday. Other senior Canadian companies reporting in this holiday-shortened week include Canadian Natural and Constellation Software Thursday, followed by BCE, Magna, Bombardier and others on Friday.  

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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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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