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Independent Accountants' Investment Counsel Inc.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • All of the major North American indices increased in value except for the Dow.  The TSX and S&P 500 reached new all-time highs again as the NASDAQ continues its climb.  These results were achieved despite negative U.S. inflation news that has been ignored by equity markets. 

  • Consumer prices rose 5% in May compared to a year ago and rose 0.7% from April.

  • The Bank of Canada held its monetary policy steady with bond purchases and interest rates unchanged in their announcement last Wednesday.  Inflation is at the upper end of the bank’s preferred range, but the temporary nature of the recovery has slowed any monetary policy changes. This could be a foreshadowing of upcoming Federal Reserve decisions. (Source)

What’s ahead for this week?

  • In Canada, April’s manufacturing sales, new orders and wholesale trade will be announced.  May housing starts, existing home sales and average prices are scheduled.  Inflation numbers that guided the Bank of Canada’s policy will be released through May’s Consumer Price Index (CPI).

  • In the U.S., the calendar includes the release of the latest figures for May’s building permits, housing starts, industrial production and retail sales.  Federal Reserve Chair, Jerome Powell, will announce monetary policy and economic projections on Wednesday following the Federal Open Market Committee’s meeting.

  • Globally, inflation around the world will dominate news as Japan, Germany and the entire Eurozone CPI will be announced.  Also, Chinese retail sales and industrial production will be announced.

 

For more information contact: icpmss@iaic.ca

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2021 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • Canadian and global equities enjoyed another week of positive gains.  For the second consecutive week the TSX was the best performing index gaining nearly 1%.  The TSX also maintains its first-place position in Year-to-Date increases for 2021.

    • This performance persisted despite the 68,000 job losses in Canada in May that pushed the unemployment rate to 8.2%.  Conversely, the U.S. added 559,000 jobs during the same period, which was below the consensus expectation of 670,000 jobs. 

    • In both countries the staging and scale of reopening weighed heavily on employment and jobs numbers.  As Canada reopens jobs are expected to be added in large numbers during the second half of the year.  In the U.S. May’s new job creation was double the number of April as the post-pandemic economic recovery continues. 

    • As of the end of May, Canada has 700,000 fewer jobs than pre-pandemic levels while the U.S. has nearly 8 million less jobs.  There is significant opportunity to add jobs as each economy recovers.  The level of unemployment will likely result in new jobs, not higher wages, as expansion occurs.  This should help delay inflation, which would spur central bank action to increase interest rates.

What’s ahead for this week?

  • In Canada, the most significant economic announcement for the upcoming week will be the Bank of Canada’s latest monetary policy announcement on Wednesday.

  • In the U.S., inflation figures through the Consumer Price Index (CPI) for May are scheduled to be released.  Wholesale inventories, Q1 flow of funds and May’s budget balance will also be announced during a relatively light week for domestic economic news.

  • Globally, China will announce its trade surplus, money supply and foreign reserves.  Japan and the Eurozone will deliver real GDP numbers.  The European Central Bank will hold a policy meeting to analyze their economic indicators and global trend to influence upcoming monetary policy statements.   On Friday the Group of Severn (G7) countries will hold a summit meeting.

 

For more information contact: icpmss@iaic.ca

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2021 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • North American equity indices delivered another week of strong returns.  The Canadian dollar was the sole declining indicator in the grid (above), but only just slightly.  Gold moved back into positive territory for its Year-to-Date returns as oil continued its rise.

  • For the TSX, the major Canadian banks led the Financial sector, and the Financial Sector led the entire index higher on its strength.  The Bank of Montreal, CIBC, Royal Bank and TD announced results that exceeded expectations for the latest quarter.  Most of the increased performance has been attributed to declining loan losses and the accompanying reserves necessary to cover unpaid debt.  The default rate on outstanding credit is a strong indicator of the health of the overall economy.  

  • American firms have also delivered impressive quarterly earnings.  According to FactSet and Standard & Poors analytics, 86% of U.S. public companies have beaten analyst profit projections, and the expected profits are more than 20% than anticipated.  The explanation is that consumer and business demand is rising quickly across the U.S. as restrictions are relaxed more quickly than in other countries.

  • In the short term the alignment of corporate profits and equity prices should provide some predictability for investors.  Early emergence from the pandemic had the promise of recovery driving stock prices, it appears that much of that promise is being delivered and markets are continuing to react positively.

What’s ahead for this week?

  • In Canada, first quarter real Gross Domestic Product (GDP) will be announced.  The annual growth rate is expected to be almost 7%.  On Friday employment data for May will be released, which will show the effects of the latest restrictions to combat the pandemic in various regions across the country.

  • In the U.S., the markets are closed to observe Memorial Day.  Once the business week begins, construction spending and Markit and ISM’s purchasing managers indices are scheduled for release.

  • Globally, Japan will release its industrial production, retail sales, household spending and consumer confidence numbers.  Germany will release its inflation, which as the largest European economy could influence future decisions for the European Central Bank.  Germany will also release retail sales and unemployment numbers.

 

For more information contact: icpmss@iaic.ca

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2021 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • It was another mixed week for investors as the North American equity indices moved in both directions.  The TSX and NASDAQ increased, while the S&P 500 and the Dow decreased in value.  The threat of inflation and higher interest rates, are causing some uncertainty in markets.

    • Higher interest rates directly increase the cost of borrowing, which raises the cost of living of consumers and for business expansion, which could slow Gross Domestic Product (GDP) growth.  Central bankers can choose to control interest rates rather than have inflation control the economy. 

    • Typically, inflation and high (or higher) interest rates may be viewed as negative for most people and investors.  The lone exception would be those who rely solely on interest income.

What’s ahead for this week?

  • In Canada, April’s manufacturing sales and March’s employment, payrolls and hours will comprise the announcements for a shortened week due to the Victoria Day celebrations.

  • In the U.S., new home sales, pending home sales, durable goods orders, personal income and spending, and first quarter real Gross Domestic Product for April will be announced next week prior to the Memorial Day observance on May 31st.  President Biden will release an annual budget as well.

  • Globally, Germany will announce its Gross Domestic Product and consumer confidence for April.  German data will be a component of the overall consumer confidence for the Eurozone that will also be released.

 

For more information contact: icpmss@iaic.ca

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2021 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • Equity markets lost value and experienced renewed volatility last week as U.S. inflation for April was released. 
    • Driving the drop is U.S. inflation; larger than expected at 4.2% over one year ago and 0.8% more than the last reported month (March).  The core inflation rate, which excludes food and energy, rose 0.9% over March.  This is the largest one-month inflation increase in 40 years, which was 1981.
    • The Federal Reserve and other central banks will be paying close attention to inflation to determine if it is directly related to reopening during the pandemic.  Many American states reduced restrictions simultaneously causing a surge in domestic demand, leading prices higher as supply lagged.  Wage growth could guide price increases once short-term stimulus savings are spent.  It appears, at this time, that wage growth is not positioned to fuel additional price increases. 
  • Canada’s inflation numbers will be released during the coming week, and are expected to mirror U.S. figures, but in a more muted manner since our reopening is lagging the timing in the U.S.

What’s ahead for this week?

  • In Canada, April’s housing starts, existing home sales, average home prices and retails sales will be announced.  Inflation for April will also be released through the Consumer Price Index as we proceed toward the Victoria Day holiday observed this year on May 24th.
  • In the U.S., housing starts, building permits and existing home sales for April are the major indicators on the calendar.
  • Globally, China will announce its industrial production and retail sales, Japan will announce its Gross Domestic Product (GDP), trade balance, inflation and industrial production, Europe will also announce its GDP along with consumer confidence.

 

For more information contact: icpmss@iaic.ca

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2021 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

North American equities did well last week except for the NASDAQ index which experienced a rare, negative reversal. 

  • The NASDAQ’s technology firms, especially the largest like Facebook, Amazon, Alphabet (Google) and Microsoft, have not delivered the performance lately that has allowed the index to outperform others in the past year.
  • The week also ended with pessimistic and disappointing employment news.  Renewed pandemic restrictions for Canadians were implemented in April leading to 207,000 job loses, about 35% more than expected. 
  • In the U.S. 266,000 new jobs were added when about 1 million additional jobs were expected.  Instead of increasing the number of new jobs from March’s result of 770,000, employment growth fell by about 200,000 jobs.  About 7 million less jobs exist today than before the pandemic began. 
  • The unemployment rate in the U.S. stands at 6.1% and 8.1% in Canada.  The rates do not seem as discouraging as expected, however, as these indicators are lower because labour force participation has fallen. 
  • About two-thirds of North American Gross Domestic Product (GDP) is comprised of consumer spending.  The purchase of products and services by individuals and families is the largest contributor to GDP.  Consumers without income (i.e. jobs) will exhaust their savings and stall economic recovery.  Monitoring job data domestically and internationally is critical to understanding progress against the pandemic.

What’s ahead for this week?

  • In Canada, the Bank of Canada Governor, Tiff Maklem, will hold a webcast where he will review the central banks actions and lay groundwork for upcoming measures.  March’s industrial price index, manufacturing sales and new orders and wholesale trade information will be released.
  • In the U.S., inflation figures for April will be released through the Consumer Price Index (CPI).  Budget deficit figures, retail sales, import and export price indices, industrial production and business inventories are also scheduled for release.

 

For more information contact: icpmss@iaic.ca

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2021 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • The NASDAQ, S&P 500, and Canada’s S&P/TSX indices reached all-time record highs for the first part of the week before falling back on Friday. (Source)

    • Solid corporate earnings have been turned in for the latest quarter.

    • President Biden continued to advance his economic recovery plan with several trillion dollars of spending.  The bills introduced include the $1.8 Trillion American Families Plan (education, child-care and social supports), the $2.3 Trillion American Jobs (infrastructure) and the approved $1.9 Trillion American Rescue Plan (pandemic relief and stimulus).

    • U.S. and Canadian economic expansion/recovery is occurring more quickly than first anticipated.

    • Canadian retail sales are rebounding more quickly than expected.  As an example, Shopify which is a major component of the TSX, reported sales much higher (about double) and profits (almost triple) ahead of expectations.

    • The Federal Reserve continues to support economic recovery despite a rise in the rate of inflation which could eventually cause interest rate increases.  The Bank of Canada made a similarly toned announcement nearly two weeks ago.

    • Pandemic case numbers are again rising in many parts of the world with the threat of renewed lockdowns and restrictions loom.  India has had more than 400,000 cases daily while they experience shortages of critical supplies like oxygen.

What’s ahead for this week?

  • In Canada, March’s merchandise trade balance is the sole major expected economic announcement.

  • In the U.S., Purchasing Managers Indices from Markit and PMI for April, March’s construction spending, goods and services trade index and factory orders data are all scheduled for release.

  • Globally, Eurozone manufacturing PMI is on the calendar, as well as German retail sales, industrial production and factory orders.  Chinese markets will be closed at the beginning of the week before they announce their April trade surplus.  Also, the Bank of England monetary policy announcement and report on Wednesday.

 

For more information contact: icpmss@iaic.ca

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2021 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

North American and global equities, the Canadian dollar, gold and oil all lost value last week. Results can be directly related to faltering success against the COVID-19 pandemic and increased fears of ongoing and increasing economic damage. 

  • The federal government released its first budget in two years that included $101.4 Billion in new spending to provide pandemic relief and position Canadians and businesses for future economic success.  The budget deficit is projected at $354 Billion for the year ended March 31, 2021 and $155 Billion for the current fiscal year.
  • The Bank of Canada (BoC) held its benchmark interest rate unchanged in its continued support for economic recovery.  It has forecast Canadian Gross Domestic Product (GDP) growth for the first quarter at 7%.  Based largely on this high rate of growth, the BoC is planning to reduce its bond purchase program and has indicated that interest rates may increase sooner than earlier projections.
  • In the US, the White House announced a proposal to increase taxes on capital gains that increased downward pressure on equities.  It was counter-balanced by first quarter earnings reports that generally exceeded analysts’ expectations.
  • The European Central Bank (ECB) kept its interest rates steady and indicated that bond purchases would be increased to support the collective Eurozone economy.

What’s ahead for this week?

  • In Canada, February’s retail sales, employment reports and Gross Domestic Product (GDP) are scheduled for release, as are March’s industrial and materials price indices.
  • In the U.S., durable goods orders and goods trade deficit, pending home sales and personal spending and income for March will be announced.  On Wednesday, the Federal Reserve will release their latest monetary announcement and conduct a news conference featuring Chair, Jerome Powell.  Later, on Wednesday evening, President Biden will deliver his first address to Joint Session of Congress (Senate and House members).

 

For more information contact: icpmss@iaic.ca

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2021 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • Equity indices reached new record levels again last week.  Driven by strong economic data and falling government bond yields in the U.S. the TSX, Dow and S&P 500 reached all-time highs. 

  • The world’s two largest economies, America and China, are growing at accelerating rates based on recently released data for Gross Domestic Product, employment, consumer confidence and spending.

  • Despite the good news, the U.S. dollar fell against foreign currencies since it is generally corelated with its falling bond yields.  The falling dollar led to a rise in commodity prices, like gold and oil in our grid above.  However, another bellwether of the U.S. economy’s health is the earnings reported by banks.  They have exceeded expectations and are 60%-250% ahead of last year.  Reserves set aside for loan losses have been larger than necessary and reversing these allowances have led to stronger profits. (Source)

  • Here at home, the TSX was pushed higher by developments in the U.S. and China, which have a strong influence over our economy’s ability to grow.  Another contributor was the Bank of Canada (BoC) releasing its quarterly Business Outlook, which achieved its highest level since 2018.  Demand is increasing and high-contact industries continue to struggle. (Source)

  • All of these factors contributed to last week’s success for equities as record highs for the Dow Jones Industrial Average, S&P 500, Canada’s TSX and Germany’s DAX were reached. 

What’s ahead for this week?

  • In Canada, the schedule includes the release of March housing starts and new housing price index, manufacturing sales and inflation through the Consumer Price Index (CPI). 

  • The Bank of Canada will release its policy announcement and monetary policy report on Wednesday.

  • The Liberal government will release the federal budget this week, which is scheduled for Monday.

  • In the U.S., new and existing home sales for March is scheduled.  Markit Purchasing Managers Indices (PMI) will show corporate confidence for expansion.  A number of large industrials will release their latest earnings reports, including United, American and Southwest Airlines, Coca-Cola, IBM, P&G, J&J, Netflix, AT&T, American Express, Travelers, Kimberly-Clark, CSX, Xerox.

  • Globally, Japan releases its March trade surplus and February industrial production, along with its PMI and inflation numbers.  The European Central Bank (ECB) holds its policy meeting. 

 

For more information contact: icpmss@iaic.ca

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2021 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • The week ended very positively for North American and global equity investors.  The broad-based indices of the TSX, S&P 500 and MSCI’s All-Country World Index achieved record highs.  A number of contributing elements played a part:

    • The US employment report that was released on Good Friday provided a positive start to the week.  The same report for Canadian jobs exceeded expectations for employment and job creation.

    • Purchasing Managers Indices (PMI) for services companies indicated an increasing optimism for economic growth.  The perspective of corporate purchasers is a strong leading indicator of future economic activity.

    • Minutes from the latest Federal Reserve meetings reconfirmed their commitment to low interest rates.

    • The International Monetary Fund (IMF) increased its forecast for overall global growth to 6% from 5.5%

    • With a drop in the value of the U.S. dollar, commodity prices rose, except for oil.  Foreign exchange influences also lifted the materials sectors within the indices as metals rose. 

    • The largest technology firms also rose; Amazon, Apple, Microsoft, Alphabet (Google) and Facebook that comprise one-fifth of the S&P 500, contributing strongly to overall record highs.

What’s ahead for this week?

  • In Canada, the Bank of Canada will release its latest business outlook, which influences its future monetary policy.  Also, February’s manufacturing sales and new orders, and March’s existing home sales and average prices from the red-hot housing market will be announced.

  • In the U.S., March inflation numbers will be released through the Consumer Price Index (CPI), as will the budget deficit, retail sales and industrial production.  The Federal Reserve Chair, Jerome Powell, will speak at the Economic Club of Washington, where he is expected to continue his organization’s strong support of recovery.

 

For more information contact: icpmss@iaic.ca

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2021 Independent Accountants’ Investment Counsel Inc. All rights reserved.