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Oil Rally and China Cybersecurity Crackdown In Focus

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US investors return to trading this morning from their long weekend to find most of the action in commodities and in Chinese stocks listed in the US.

Energy commodities are surging again this morning with WTI crude oil up 1.0% as OPEC+ talks over how to continue their production restoration program beyond this month completely broke down. Natural gas is up another 1.0% as a North American heat wave boosts cooling demand. Metals are also on the move today with copper climbing 2.5%, platinum rallying 2.0% and gold jumping 1.5%.   

Investors may recall that a few weeks ago cryptocurrencies came under pressure after China cracked down on them. It appears that Chinese regulators are at it again this week. Ride sharing company Didi is down 18.9% in premarket action this morning after China’s government ordered a cybersecurity review related to data collection. Investors appear to be particularly spooked by this move since the stock debuted on the NYSE June 30, less than a week ago, and is trading below its IPO price. Other Chinese companies listed in the US have come under pressure to varying degrees this morning as well with investor confidence getting rattled.

The ISM US service PMI report is due at 10:00 am EDT today. Investors are expecting the headline number to hold steady at 64.8. Following last week’s manufacturing PMI numbers, the street may also look to the prices paid component (street 79.3 vs previous 80.6) for signs of whether inflation pressures are increasing (as they did in the manufacturing PMI report) or receding. New orders are expected to slow to 60.3 from 63.9 last month.  

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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