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Service PMI Reports, Earnings, and Leadership Changes In Focus

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Its a mixed day for equity markets around the world so far as investors digest a flurry of economic, political and corporate events. The biggest action so far today has been in Italy where Milan’s bourse is up 2.5% on the news that former ECB President Mario Draghi is preparing to form a “unity” government to deal with the current political, medical and economic crises.  Other major European indices are more or less flat as investors digest a round of service PMI reports which were still slightly below 50 in contraction territory, but not as bad as the street had feared, such as the Eurozone (45.4 vs street 45.0). The FTSE is down slightly today as UK service PMI remained weaker than its continental peers (39.5 vs street 38.8).

US index futures are flat to up 0.7% as stocks consolidate and/or build upon yesterday’s 1.50% gains for US indices. This month’s US ADP private sector payrolls report was much stronger than expected with jobs increasing by 174K in January, more than tripling the 50K street estimate, while the December decline was revised upward to -78K from -123K. US ISM Non-Manufacturing PMI is due at 10:00 am EDT with the street expecting the headline number to hold steady at 57.5.

As more and more earnings reports roll out, results have become increasingly mixed. Companies who reported positive news overnight and this morning include: Amazon.com ($14.09 vs street $7.23, CEO Jeff Bezos to step down but remain as Chair, sales topped $100 million for the first time), Alphabet (Google) ($22.30 vs street $15.90, up 7.6% premarket), Freeport McMoRan (reinstated dividend 50% higher than it was before it was suspended last year),

Companies who posted disappointing news include: Amgen (sales growth to slow to 3% in 2021 from 9% in 2020, paused or ended 3 cancer related clinical trials), Chipotle Mexican Grill ($3.48 vs street $3.73), and Spotify (-$0.79 vs street -$0.69, down 6.9% premarket)

Commodities are also picking up for the most part with WTI Crude Oil up 1.0%, and copper up 0.5%. Precious metals are also climbing with Gold up 0.4%, Silver up 2.3% and Platinum gaining 1.3%.

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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