Yesterday’s attempt at a New Years Rally turned out to be very brief as stocks tumbled yesterday to start the new trading year, sending US indices down 1.25%-1.50%, on a combination of profit-taking and concern over the impact of lockdowns on the economy after UK PM Johnson extended the UK lockdown into February, and US construction spending for November came in below expectations (0.9% vs street 1.0% and previous 1.6%).
This morning finds US index futures and major European indices flat as investors digest Monday’s bearish turn of events. In North America, the spotlight is on today’s runoff election for two Senate seats in Georgia which will determine which party controls the upper chamber. US ISM manufacturing PMI (street 56.6 vs previous 57.5) is due out at 10:00 am EDT this morning.
WTI and Brent crude oil are both up about 1.4% today as investors await news from an OPEC+ meeting being held today to discuss production levels. Even though the group just implemented a smaller than initially expected production increase this month, a new 0.5 mmbbl/d production cut is reportedly on the table to offset the impact of new and extended lockdowns on near-term demand.
Gold and silver are up for a second straight day, this time posting gains of 0.25% and 0.80% respectively, indicating that some of the capital coming out of equity markets this week has been rotating into defensive havens including precious metals and the Japanese Yen. Sentiment remains positive toward metals in general with copper climbing another 1.1% and platinum rallying 1.75%.
SIA Wealth In the Media
Chief Market Strategist appeared on BNN Bloomberg recently to discuss relative strength in current markets and the outlook for early 2021. A replay link is below.
Commodities have been the stronger relative performers in the last three months: SIA’s Cieszynski