Morning Minutes

Rebound In Stocks Ends With Investors Focused on Inflation and Energy Prices

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Yesterday’s rebound in world stock markets sputtered out overnight as indices turned downward once again with investors continuing to grapple with the potential for high inflation and a slowing economy. The Hang Seng plunged 2.5% in Asia Pacific trading, while in Europe this morning, the Dax is down 2.0% and the FTSE is down 1.3%. US index futures are down 1.3%-1.6%, giving back a substantial part of yesterday’s 2.1%-2.5% gains.

More signs of high and rising inflation, which may keep the pressure on central banks to keep tightening monetary policy, appear to be putting a headwind in front of equities today. Canadian consumer prices increased more than expected (7.7% vs street 7.4% and previous 6.8%). In the UK, consumer prices met expectations but were still increasing (9.1% in line vs previous 9.0%) while raw material (22.1% vs street 19.4%), industrial output (15.7% vs street 14.7%) and retail (11.8% vs street 11.4%) prices all exceeded expectations. Fed Chair Powell is speaking to congress today where we may hear more about the Fed’s commitment to fighting inflation.

Commodity prices are tumbling today. WTI Crude Oil is down 5.1% trading just above $100.00/bbl, while copper is down 3.2%. US President Biden is speaking today amid rumblings of US governments looking at cutting fuel taxes for the summer (possibly in a bid to salvage driving season or to get gas prices down heading toward midterm elections this fall).

Cryptocurrencies are down today suggesting investor sentiment remains wary, but key psychological support levels are holding so far. For example, Bitcoin is down 2.8% but holding above $20,000 while Ethereum is down 4.2% but holding $1,000.

SIA Wealth In The Media:

Chief Market Strategist Colin Cieszynski recently appeared on BNN Bloomberg today where he discussed current market conditions, the summer outlook, and investing strategies in a rising interest rate environment.

We are growing our cash position: Colin Cieszynski

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

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