Morning Minutes

Rising Inflation Drags on World Markets




Stock markets around the world have been selling off to start the new trading week. Asia Pacific trading saw the Hang Seng lose 2.7% and Shanghai drop 1.2%. In Europe this morning, the Dax is down 1.0% while the FTSE is down 0.4%. US index futures are down 0.5%-0.9% coming off of a flat Friday.

Last week’s strong US nonfarm payrolls report ended up not providing markets with any boost and today’s action suggests that investors primary concern continues to be the impact of high inflation and tightening monetary policy. Over the weekend, China released inflation numbers that showed consumer prices climbing more than expected (2.5% vs street 2.4% and previous 2.1%), and producer prices levelling off but not falling as much as hoped (6.1% vs street 6.0% and previous 6.4%). US consumer and producer prices are due Wednesday and Thursday of this week. The Bank of Canada is announcing its latest interest rate decision on Wednesday morning with a 0.75% hike widely expected. On Friday, focus turns to GDP and retail sales numbers for China plus the US retail sales report.  

Investors also appear to be biting their nails ahead of this week’s kickoff to US earnings season which starts with Pepsico tomorrow and picks up on Thursday and Friday with several big banks reporting results. Twitter falling 5.0% premarket after Elon Musk withdrew his takeover bid over the weekend hasn’t been helping sentiment either.

With the US 10-year treasury yield holding above 3.0% and capital apparently still exiting risk markets for defensive positions, the US Dollar is steamrolling everything in its path again today. The Euro is down 0.8% and testing par today while Pound is down 0.7% and gold plus the Canadian Dollar are down 0.5%. Commodities are also getting hammered again this morning.  WTI crude oil is down 2.4% but still holding $100.00/bbl, while copper is down 1.5%. Natural gas is up 5.0% with Russian gas pipelines down for planned summer maintenance but when and how much supply may eventually return remaining an open question.

Subscribe to the Morning Minutes:

Today's earnings reports and market activity, delivered right to your inbox.

Colin Cieszynski, Chief Market Strategist

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

Read More

Legal and Regulatory Disclosures

Terms and Conditions:
This information is for Investment Advisors only. The website is for informational purposes only and is not intended to provide a complete description of SIA Wealth Management’s products or services. Past performance is not indicative of future results. It should not be construed as investment advice or relied upon in making an investment decision. Products and services of SIA Wealth Management are only offered in jurisdictions where they may be lawfully offered for sale. The information contained in this Website does not constitute an offer or solicitation by anyone to buy or sell any investment fund or other product, service or information to anyone in any jurisdiction in which an offer or solicitation is not authorized or cannot be legally made or to any person to whom it is unlawful to make an offer of solicitation. All products and services are subject to the terms of each and every applicable agreement. It is important to note that not all products, services and information are available in all jurisdictions outside Canada.

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. SIA Wealth Management Inc. 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.