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Stocks Slide, Oil Plunges as Growing Covid Delta Cases Rock Markets

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Equity markets around the world are off to a rocky start this week with US index futures down 0.9% to 1.4%, the Dax and FTSE down 2.8% and 2.5% respectively in European trading, with the Nikkei and Hang Seng down 1.2% and 1.8% in Asia Pacific trading. Investors continue to either ignore or are taking profits against last week’s positive US earnings and US retail sales reports and this week’s UK reopening and OPEC+ deal. It appears at this point that new surges in delta variant COVID cases in several countries have rattled sentiment by reminding investors that the road to recovery could be bumpier than previously thought.

Energy contracts are heading in opposite directions this morning with WTI crude oil plunging 3.5% and natural gas rallying 2.5%. Oil has been under pressure despite OPEC+ coming to a deal over the weekend to restore 400,000 bl/d of production to the market per month from August 2021 through September 2022, at which point all of the previous cuts would be restored, and confirming supplier discipline in the market.

Earnings season resumes this evening with results from IBM. Results continue to come from banks but also broaden out into more sectors including railroads, drillers, consumer products and semiconductors. Other headliners this week include Netflix on Tuesday, Coca-Cola on Wednesday, Intel and Twitter on Thursday, and American Express on Friday. Earnings also start to trickle out from Canadian companies this week including Canadian National Railway on Tuesday, Rogers Communications on Wednesday and Air Canada on Friday.

It’s a quiet week for economic news. The Peoples Bank of China is meeting tonight and then most of the week is dominated by housing related numbers until Friday when flash PMI reports from around the world and Canada retail sales are due.

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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