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STOCKS SLIDE INTO MONTH-END WITH VACCINES AND EARNINGS IN FOCUS

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The last trading day of January finds bourses around the world in retreat once again. US index futures are all down about 1.2% including a 350 point drop in Dow futures. Overseas, the Dax and Hang Seng are down 1.0%, the FTSE is down 1.75%, the Nikkei fell 1.9%.

There are a number of factors that may potentially be dragging on major indices today including: month-end position squaring, profit-taking against earnings news or ahead of the weekend. A report from Johnson & Johnson that its COVID vaccine is about 66% effective, less than some of its rivals, may be easing speculation of a quick rollout and economic rebound. Meanwhile, we continue to see high volatility in some actively traded stocks. For example, Gamestop is up 75.6% in premarket action this morning after falling 44.2% yesterday.

In economic news today, US personal income (0.6% vs street 0.1% and previous -1.7%) and personal spending (-0.2% vs street -0.4% and previous -0.7) both beat expectations for December and showed some improvement. Canadian GDP increased by 0.7% in November, beating the $0.4% street estimate. US Chicago PMI is due at 10:45 am this morning (street 58.5) in a potential preview of Monday’s national report. Incoming US Treasury Secretary Janet Yellen is speaking at noon EST today which investors may look to for comments related to plans and progress on fiscal stimulus and other spending priorities.

Several US companies have reported earnings overnight and into this morning including: Caterpillar* ($2.12 vs street 1.49), Visa ($1.42 vs street $1.28), Chevron (-$0.01 vs street $0.08), and Honeywell ($2.07 vs street $2.00).

*Shares of Caterpillar are held in some portfolios managed by SIA Wealth Management.

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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