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Stocks Consolidate Gains as More Retailers Beat The Street

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Shrugging off a bit of overseas softness overnight, US index futures are holding steady trading between -0.1% and +0.1% as investors digest yesterday’s US index gains of 0.15%-0.75%, and another round of retailer earnings.

A day after Walmart and Home Depot posted strong results, their biggest competitors are out with mixed news. Target beat the street on EPS ($3.03 vs street $2.83), and same store sales (12.7% vs street 8.2%) but indicated that it is not passing all of its cost increases along to customers, implying margins are getting squeezed. Lowes, meanwhile, posted stronger than expected earnings ($2.73 vs street $2.36) and raised its full year sales forecast. Furniture retailer La-Z-Boy also beat EPS expectations ($0.85 vs street $0.78).

Gold and silver are rallying again today with gains of 0.6% and 1.0% respectively, on the back of new inflation reports. Canadian consumer prices (4.7% vs previous 4.4%) increased again in line with street expectations.  Meanwhile in the UK, inflation pressures continue to rise with consumer prices (4.2% vs street 3.9% and previous 3.1%), retail prices (6.0% vs street 5.7% and previous 4.9%), and producer input prices (13.0% vs street 12.1% and previous 11.9%) all increasing even more than feared. Today and tonight, there are six Fed speakers, two ECB speakers, and one RBA speaker out talking so we may get even more color on what central bankers are thinking about their economies and inflation.

WTI crude oil (down 0.7%, holding $80.00/bbl) and natural gas (down 3.1%, holding $5.00/mmbtu), are backsliding today while testing key technical round numbers. DOE oil inventories are due at 10:30 am today (street 1.4 mmbbl build). Weather conditions for natural gas and speculation surrounding the potential of increased supply from stockpiles for oil continue to influence day to day sentiment.

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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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