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Markets Pause To Consolidate Monday Rally

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After starting the week and month off strong with gains of 2.0% to 3.0%, US index futures are flat this morning while investors digest yesterday’s news and market action. Overseas bourses are mixed with the Dax up 0.5% and the FTSE up 0.6%, but the Nikkei down 0.9% and the Hang Seng down 1.2%.

Commodities continue to climb this morning, attracting ongoing support from yesterday’s positive manufacturing and construction numbers. WTI crude oil is up 0.5%, natural gas is up 1.0%, and copper is up 1.1%. Currencies, including precious metals and bitcoin, along with the US 10-year treasury yield, are steady this morning.  

US construction spending was particularly strong (1.7% vs street 0.8%), along with the new orders component of the US ISM manufacturing PMI report (64.8 vs previous 64.1). The ISM report also indicated rising prices paid (86.0 vs street 80.0) which could stoke concerns that rising inflation may eventually force interest rates upward.

There were a few earnings reports of interest out overnight. Zoom beat the street by a country mile on EPS ($1.22 vs street $0.79 and is up 6.2% premarket on top of yesterday’s 9.6% gain. Target also beat expectations on both EPS ($2.67 vs street $2.54) and same store sales (20.5% vs street 16.8%).

Canada’s Q4 GDP came in stronger than expected (9.6% vs street 7.5%). Tomorrow morning brings the US ADP private sector payrolls report (street 177K vs previous 174K).

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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