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STOCKS AND METALS SLIDE AHEAD OF TODAY’S FED DECISION

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World markets are trading lower this morning as investors respond to more earnings reports and await today’s Fed monetary policy decision. Ahead of the meeting, the US dollar is trading higher against other majors, climbing 0.4% against the Euro, 0.5% against the Canadian Dollar and 0.6% against gold. Other metals are under pressure today with silver falling 1.7% and copper dropping 1.1%.

Market action suggests that investors are not expecting any new stimulus from the FOMC today. Investors may look to comments in the statement or the press conference related to current and projected economic conditions, any hints on whether additional stimulus is under consideration, and any thoughts on how the central bank plans to work with the incoming administration, particularly since the new Treasury Secretary, Janet Yellen, was current Chair Powell’s predecessor.

US index futures are down 0.75% to 1.00% this morning, with Dow futures down nearly 300 points, continuing overseas markets’ downward course which has seen the Dax drop 1,8%, the FTSE fall 1.3% and the Hang Seng slip 0.3%. Weaker than expected US durable goods orders for December (0.2% vs street 0.9% and previous 1.2) aren’t helping the bulls cause.

Another flurry of earnings reports have come out overnight and this morning. Canadian National Railway beat expectations on earnings ($1.43 vs street $1.41) and raised its dividend by 7%. Management indicated that a sharp drop in petroleum related revenue was offset by growth in lumber, potash and consumer goods volumes.

Highlights of today’s US earnings reports include: Microsoft ($2.03 vs street $1.64), Starbucks ($0.61 vs street $0.55), Texas Instruments ($1.64 vs street $1.34), Advanced Micro Devices ($0.52 vs street $0.47) and Boeing (sales $15.3B vs street $15.0B, earnings distorted by large charges against the 737 ad 777 programs due to groundings, and falling demand for air travel).  After the close today, results are due from Apple, Facebook, and Tesla.

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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