Morning Minutes

Oil Rally and China Cybersecurity Crackdown In Focus




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.  

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Colin Cieszynski, Chief Market Strategist

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

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