After getting crushed yesterday on concerns over tightening monetary policy and a weakening global economy, stock markets have been trying to bounce back this morning, but so far gains have been small relative to recent losses. For example, US index futures are having a nice morning with gains of 0.7%-1.2% but for shell shocked investors these appear feeble relative to yesterday’s losses of 3.25% for the S&P 500 and 4.1% for the NASDAQ.
Overseas, the Dax, FTSE and Hang Seng are all up 1.0%-1.1%. The Nikkei fell 1.1% and the Japanese Yen plunged another 1.8% after the Bank of Japan made no changes to its stimulus programs, leaving it increasingly isolated and lonely in the dovish camp. The US Dollar and Gold, even with each other, have been gaining against other currencies with the Euro down 0.6%, the Pound down 0.7% and the Loonie down 0.4%. Commodities are also in retreat this morning with WTI crude oil down 0.6%, natural gas down 2.4%, and copper down 0.7%. Cryptocurrencies have settled down today in mixed action but overall, currency trading suggests a cautious tone among investors.
Even with this week’s rate hikes, inflation pressures remain high. Canadian industrial prices increased more than expected in May (1.7% vs street 0.5%). US industrial production is due shortly (street 0.4%). It’s another busy day for Fed news with Chair Powell speaking this morning, the US central bank’s latest Monetary Policy Report is also due today and Governor Waller is speaking tomorrow.
Investors should note that US markets are closed Monday for the new Juneteenth holiday. Ahead of the long weekend, it’s Quadruple Witching Day so we could see potentially see some volatility around position squaring as the day progresses.
New Video: SIA Wealth June Market Outlook Webinar Replay
A replay of the SIA Wealth Market Outlook Webinar with Colin Cieszynski – Chief Market Strategist, answering the most asked questions we have received from advisors over the past month, including: defensive versus tactical investing strategies, the state of the economy and markets heading into summer, and past experience in US midterm election years – is now available.
YouTube Version: https://youtu.be/ZEhJwIrM9pk
