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Mixed Markets Greet a Busy Day For Central Bank Speeches and Earnings

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US Index futures are flat (Dow Futures) to lower (NASDAQ futures down 1.5%), continuing their momentum from yesterday which saw the Dow finish flat, but the NASDAQ drop 2.5%. Overseas action has also been variable. The Dax is down 1.0%, but the FTSE is flat and over in Asia, Hong Kong climbed 1.0% and Tokyo gained 0.4%. In commodity trading, platinum, down 1.4% and natural gas, down 1.7% are under pressure for a second straight day. The other major metals are flat while WTI crude oil is up 0.5%. Cryptocurrencies are getting hammered again today with Bitcoin losing over 10% of its value and falling back under $50,000.

It’s another light day for economic news but Fed Chair Powell’s semiannual testimony to Congress starts at 10:00 am EST, may attract some attention. With the US 10-year treasury note yield on the rise and currently trading near 1.35%, traders may be particularly interested in the central bank leader’s comments on the outlook for US economic conditions and his interest rate outlook. Similarly, Canadian investors may look to Bank of Canada Governor Macklem’s speech at 12:30 EST today for insights into where economic conditions and monetary policy may be heading as more provinces start to reopen.  

The last big week for earnings this quarter really kicks into gear this morning with a number of results out from Canadian banks and US Retailers. Highlights include:

Canadian bank earnings week is off to a very strong start. Bank of Montreal crushed EPS expectations ($3.06 vs street $2.15) boosted by a 67% increase in profits from its US division from a year ago, and 5% growth in Canadian banking earnings, plus a reduction in its loan loss provisions to $156M from $432M. Bank of Nova Scotia also handily beat street expectations on EPS ($1.88 vs street $1.57), boosted by 46% growth from its Global Banking and Markets division, plus 37% growth from its Wealth Management business.

US retail earnings have also been coming in better than expected. Home Depot beat the street on earnings ($2.65 vs street $2.62) as same store sales growth exceeded expectations (24.5% vs street 19.2%). Meanwhile, Macys reported stronger than expected EPS ($0.80 vs street $0.12) and a smaller than feared drop in same store sales (-17.1% vs street -21.3%).

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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