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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?

  • 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.

(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 markets were closed on Friday, and the shortened week proved to be a spring tonic for most investments.  The equities indices and oil gained, while the Canadian dollar essentially broke-even and gold lost value only slightly.

  • It was mostly news from the U.S. which drove values higher, evidenced by the Dow’s new record high and the S&P 500 rising above 4,000 for the first time.  The vaccine schedule is accelerating with many American states beginning to include all adults in the rollout as more than 200 million are expected to have received at least one dose in the near future.  Pfizer announced that its vaccine was safe and highly effective for early teens.  Fiscally, the Biden administration unveiled its infrastructure plan with expenditures totaling $2.25 Trillion.  Transportation, manufacturing, workforce development, housing, elderly care, electrical and broadband grid and clean energy are all included.

  • In Canada our Gross Domestic Product (GDP) numbers for January was revised higher.  The TSX reflected this and finished the week just below 19,000 points.  The leading Canadian index has gained nearly 9% in 2021, one of its best quarters, and is currently beating the major U.S. indices in Year-to-Date performance, which is a rare achievement.  The TSX gain has been across many sectors to achieve this large an increase this early in the year. (Source)

What’s ahead for this week?

  • In Canada, February’s merchandise trade balance will be announced along with Canadian employment numbers for the month of March.  The reopening should be reflected in the jobs growth achieved last month.

  • In the U.S., the scheduled announcements for the week include February’s factory orders, wholesale inventories, and the goods and services trade balance.  The Federal Reserve Chair, Jerome Powell, will join a combined World Bank and International Monetary Fund meeting to debate the global economy in 2021.

  • Globally, European markets remain closed on Monday, while its jobless rate for the region will be posted on Tuesday.  Mid-week, the G20 finance ministers and central bank governors will meet via videoconference.

The latest details from the Canadian Federal Government on stimulus and economic assistance are available here.

The latest details of the current Canada’s Covid-19 Economic Response Plan are available here.

 

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 a mixed week for North American equities as the TSX and NASDAQ lost ground while the S&P 500 and the Dow moved ahead. 

    • The primary driver of equity values continues to be the progress against the pandemic, both domestically and globally.  Restrictions in Europe are being reimposed as case rates have begun to climb, which is a trend that is also reappearing in Canada and the U.S. 

  • The major equities indices have logged strong gains for the first 12 weeks of 2021.  The NASDAQ lags the field at 2% for the year while the Dow leads with slightly more than 8% gains. 
  • Stimulus cheques began to arrive for American families and are expected to increase consumer spending in the short term.  For longer-term economic stimulus, a proposed infrastructure bill has been introduced by the Biden administration.  Both measures are designed to spur economic recovery.

  • In Canada the Federal and Provincial government fiscal measures and Bank of Canada monetary policy moves have been generally successful.  Fortunately for families and the most vulnerable, foreclosures and evictions have not risen as quickly as employment and business closures, but it has been very difficult for many.  Like many businesses, governments and our central bank were forced to conduct operations virtually and imagine, design, and implement solutions in record time.  A recap of some of the activity can be found here, it serves as a reminder of the challenges and solutions, as well as the timing and sequencing of them.

What’s ahead for this week?

  • In Canada, the most significant economic release will be January’s Gross Domestic Product numbers which measures Canada’s overall output.  The pace of its growth will indicate how well we are recovering during the pandemic.  Also, the TSX will be closed on Friday.
  • In the U.S., markets will be closed on Friday and economic releases will be lighter than usual during the short week.  February’s construction spending, along with March’s Purchasing Manager’s Index (PMI) from both ISM and Markit are on the calendar.

 

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?

Despite the overall negative finish for American equities indices by the end of the week, there was some positive news. 

  • Both the S&P 500 and the Dow, along with the TSX, rose to record all-time highs again last week before falling back.  The TSX breached 19,000 points briefly before essentially breaking-even for the week by gaining 2 points.
  • Rising bond yields that are drawing investments away from equities into debt investments seems to be the main culprit for the dip at week’s end.  Bond yields tend to help the Financial sector, which provided stability for the TSX when oil prices fell more than 6% last week and dragged down the Energy sector. 
  • Additionally, initial jobless claims rose last week, retail sales and housing starts fell below expectations.  The severe weather was blamed, especially its effects in Texas.

The Federal Reserve’s continued communication that interest rate increases are not expected until 2024 provided price support for equity values.  Concern for equities could grow if the Federal Reserve reversed itself on rate increases to battle rising inflation.  However, as the pace of vaccinations rises and infection rates begin to fall, then pandemic restrictions should start to be lifted and could lead to increased jobs growth and consumer confidence.  Since consumer spending is about 60% of the economy, the increases in employment and confidence coupled with U.S. stimulus cheques may lead to rapid economic growth.

 

What’s ahead for this week?

In Canada, February’s wholesale trade and manufacturing sales as well as both Ontario and Quebec budgets are scheduled to be released.

 

In the U.S., February existing and new home sales, durable goods orders, and personal income and spending reports are scheduled.

The latest details from the Canadian Federal Government on stimulus and economic assistance are available here.

The latest details of the current Canada’s Covid-19 Economic Response Plan are available here.

 

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 gained ground last week due to positive economic announcements and legislative events.

    • Indicators show that growth in the inflation rate have slowed or are lower than predicted.  Consequently, central banks are not expected to take any action that would slow economic growth while tamping down inflation. 

    • The Bank of Canada held its interest rate and bond-buying program steady in its announcement on March 10th.

    • The U.S. Covid-relief bill passed through Congress and was signed into law.  The $1.9 Trillion bill contains multiple measures, including rent relief for individuals and businesses, increases for consumer spending with direct payments to households, and additional Democrat-led initiatives to assist lower income individuals.

    • The Organization for Economic Cooperation and Development (OECD) has increased its forecast for global GDP growth for this year.  Applications for unemployment benefits fell to levels not seen since November and job openings are rising faster than expected according to the U.S. Bureau for Labor Statistics.

  • 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, February housing starts, home sales and average price will be announced along with inflation through the Consumer Price Index.  January data will be released for Canadian retail sales and manufacturing sales and new orders.

  • In the U.S., retail sales, industrial production and capacity utilization, building permits and housing starts for February will be released.

The latest details from the Canadian Federal Government on stimulus and economic assistance are available here.

The latest details of the current Canada’s Covid-19 Economic Response Plan are available here.

 

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 markets performed well last week. 

    • StatsCan announced Canadian GDP was higher than expected for December and the fourth quarter of last year. 

    • Our expanding economy seemed to be prevailing in small measures despite the negative restrictions that have been put in-place to control the pandemic. 

    • The rise in the price of oil help boost the Energy sector, the second largest sector comprising the TSX index. 

    • Financials, the largest sector of the TSX, continued to benefit from last week’s strong bank earnings that totaled nearly $14 Billion and from rising bond prices.  Higher bond rates typically raise earnings for Financials, and the high earnings could be poised to increase should the pandemic and its economic effects be lessening.

  • On Friday the U.S. jobs report for February was released. 
    • Many of the measures remained unchanged although 379,000 non-farm jobs were added. 
    • The unemployment rate held firm at 6.2%, 10 million Americans were unemployed. 
    • One year ago, prior to the pandemic, the unemployment rate stood at 3.5% with 5.7 million unemployed.  The groups that are taking the brunt of pandemic induced job loss are African Americans and Hispanics.  Nearly 2 million have had their full-time jobs downgraded to part-time employment.  The employment numbers will continue to be a representation of economic recovery. (Source)

What’s ahead for this week?

  • In Canada, it will be our turn for February employment numbers.  On Wednesday the Bank of Canada will release its latest interest rate decision.  Comments by Tiff Macklem, Bank of Canada Chair, will be closely monitored and analysed as inflation fears and bond rate uncertainty have risen.
  • In the U.S., the focus of economic releases will be inflation for February with the release of the Consumer and Producer Price Indices (CPI and PPI, respectively).  Inflation as a positively corelated indicator of economic growth is the measure that central bankers are watching to guide any interest rate increases.  None are expected in the near term but noting inflation’s movement could provide some hints of interest rate changes.

The latest details from the Canadian Federal Government on stimulus and economic assistance are available here.

The latest details of the current Canada’s Covid-19 Economic Response Plan are available here.

 

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 a trying week for North American equity investors. 

    • The major indices fell by 2% and the NASDAQ doubled that decline. 

    • The Canadian dollar lost another percentage point to its American counterpart.

    • The lone gainer on our grid was oil, but it did not feel like positive progress at the gas pump, at least for Canadian consumers.

  • The results by the large Canadian banks provided support for the TSX and its most heavily weighted sector, Financials. 
    • The Bank of Montreal and Scotiabank led off with profits higher than pre-pandemic levels for the most recent quarter.
    • CIBC, RBC and TD also delivered impressive results. 
    • Lower loan-loss provisions, lower credit default rates, and increased revenues were the reasons the banks were able to exceed analyst earnings expectations.  These institutions were able to best their own expectations and are admittedly further ahead on recovery than they expected.  Collectively, they earned $13.9 Billion in the quarter ending on January 31st. (Source)

What’s ahead for this week?

  • In Canada, December and the 2020 Q4 Gross Domestic Product numbers will be released and will provide the latest data on our economic recovery.  January’s building permits and trade balance are also scheduled.
  • In the U.S., the Purchasing Managers Index from ISM for both products and services will be released.  These reports summarize the forward-looking confidence of corporate buyers.  February’s employment numbers will demonstrate if the U.S. recovery has resulted in improvements in jobs, job creation and joblessness.

The latest details from the Canadian Federal Government on stimulus and economic assistance are available here.

The latest details of the current Canada’s Covid-19 Economic Response Plan are available here.

 

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.

February 16-19, 2021: Last Week in the Markets

(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?

  • Most global indices finished the week below where they started, with the Dow being a notable exception. The TSX, S&P 500, and NASDAQ finished the week lower after reaching new all-time highs on Tuesday.
    • Vaccine distribution (or at least news of increased production and distribution) contributed to early gains last week.  Equities have been very responsive, both positively and negatively, to COVID-19 news and are not expected to lose their correlation soon.
  • Canada’s Consumer Price Index (CPI) had its largest monthly increase in about a year, which was driven by the prices of durable goods and gasoline. The U.S. Producer Price Index (PPI) also rose at higher levels than recently seen. 
    • Both indices have moved closer to the long-standing target inflation rate of 2%. The Federal Reserve and Bank of Canada have indicated that they will begin raising interest rates once an average of 2% inflation is reached.  The fear is that growth would need to be trimmed to control inflation before economic recovery is fully achieved.  Rates are at the bottom of their effective range, and with inflation growing, rates may eventually rise. (Source1, Source2, Source3)                   

What’s ahead for this week?

  • In Canada, it will be a relatively light week for economic data announcements with employment data for December the lone major event on the calendar.  The major Canadian banks will release their most recent quarterly performance.  Since these stocks are so widely held, their results are meaningful to almost every Canadian investor.
  • In the U.S., January’s new home sales and pending sales, consumer spending and income, and durable goods orders will be released.

The latest details from the Canadian Federal Government on stimulus and economic assistance are available here.

The latest details of the current Canada’s Covid-19 Economic Response Plan are available here.

 

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.