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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?

  • Losses in equities for the second consecutive week were not as severe as the previous week. The year-over-year (1Yr) advances remain in the 24 – 38% range, and so far, year-to-date (YTD) equities have gained between 13 -18%.  Inflation fears and resultant monetary policy responses have heavily influenced markets lately.

  • Inflation in Canada surged to its highest level since 2003 as prices in August rose 4.1% compared with a year earlier.   Comparing July 2020 to July 2021 the inflation rate was 3.7%.  August becomes the fifth consecutive month where inflation exceeded the Bank of Canada’s target annualized year-over-year rate of 2%.

  • In the U.S. year-over-year inflation rate fell slightly from 5.4% in July to 5.3% in August.  The month-to-month inflation rate also declined.  Prices rose 0.3% in August compared to July, down from 0.5% for the period of June to July.  This very slight moderation, and the lower core rate of inflation at 4.0% for August versus 4.5% for July, supports the Federal Reserve’s position to maintain current programs. 

What’s ahead for this week?

  • In Canada, retail sales for July and the new housing price index for August will be released.  The Federal government has tentatively scheduled a release of July’s budget balance.  A summary of party stances on election issues can be found here.

  • In the U.S., housing starts, building permits, existing home sales for August will be announced.  The Chair of the Federal Reserve, Jerome Powell, will speak following the Federal Open Market Committee’s announcement of monetary policy and an update to economic projections.

  • Globally, capital markets are closed at the beginning of the week in Japan and China.  Eurozone consumer confidence, manufacturing and service Purchasing Managers Indices (PMI) will be released.  The Bank of England will announce its monetary policy, and the European Central Bank released its economic projections.

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 with Canada’s jobs report for August beating expectations by adding 90,000 in the month. The unemployment rate fell to 7.1% from 7.5%. The Canadian economy is 200,000 jobs below February 2020 levels, with the hospitality sector making up much of the lost ground as reopening continues.

  • To continue to bolster our economy the Bank of Canada left its supportive monetary policy actions unchanged. The Bank Rate is ½%, and the overnight rate and the deposit rate have been held steady at ¼%. The bond buying program also remains unchanged. (Source)

  • A lingering condition that has been influencing economic growth is supply-chain disruptions. As businesses reopen and attempt to return to full production, the availability of raw materials and component parts has not been universal. For example, the backlog of vehicles is large as the shortage of computer chips prevents the delivery of fully finished cars and trucks to new buyers. Recently automakers have announced plant closures and layoffs until the supply chain issues are resolved. Similar situations are found across the economy, and until it is resolved, the return to full production will be difficult.

  • As a result, equity markets have reflected the current and looming issues as the major North American indices lost value last week. As noted in previous Market Updates, volatility is expected to increase while these issues work themselves out.

What’s ahead for this week?

  • In Canada, manufacturing sales and new orders for July and the Consumer Price Index for August along with the existing home sales, housing-starts and average home prices will be released.

  • In the U.S., inflation for August through the Consumer Price Index is the most significant indicator to be released this coming week. Industrial production will also be announced along with the important retail sales figures.

  • Globally, Japan’s industrial production, machine orders and trade balance, China’s retail sales, industrial production, Eurozone consumer inflation, industrial production and trade surplus will all 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 indices continued to power ahead again last week, with the exception of the Dow. 

    After maintaining value for the first four days of the week, twenty of the thirty Dow firms lost value on Friday. 

    • The one-day performance of only twenty firms, albeit large companies like Amex, IBM, Coca-Cola and 3M, caused the Dow index to finish in negative territory for the week. (Source)

    • For perspective, the Dow has still returned more than 15% in 2021.  The other major North American equity indices have delivered 20% so far this year. 

    • Forecasts for corporate growth and profitability continue to rise while Gross Domestic Product (GDP) growth forecasts are beginning to flatten.  Since GDP is a fair proxy for aggregate of corporate performance the forecasts are starting to contradict each another.  The typical response to this contradiction has been increased volatility.

What’s ahead for this week?

  • In Canada, after closing for the observance of Labour Day on Monday the major domestic, economic news will be the Bank of Canada’s policy announcement on Wednesday.  On Friday the employment report for August will be released.

  • In the U.S., markets will be closed on Monday before the release of July jobs report, producer price index, wholesale trade and the most recent weekly jobless claims later in the week.

  • Globally, China is scheduled to announce consumer and producer inflation, trade surplus and foreign reserves.  Eurozone factory orders, Q2 Gross Domestic Product, and Germany’s industrial production and trade surplus will be released.  The European Central Bank will hold a monetary policy meeting on Thursday.

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 markets were heavily influenced by U.S. monetary policy last week.  The minutes from the most recent Federal Reserve’s Open Market Committee meeting suggest that the bond purchase program could be scaled back sooner than anticipated.  While no decisions have been made and no actions have been taken, it appears that markets are realizing that enhanced stimulus measures are not an indefinite solution.

  • The overall results last week were typical under these circumstances. 

    • Firstly, uncertainty rose on the increased likelihood of more future, negative news from the Fed, which caused equities to retreat by the end of the week. 

    • Then this less supportive monetary policy that could cause business activity to fall, and the demand for oil to also fall as corporate activity stalls, resulted in a 9% drop in the price of oil.  The outflows from equities were invested into gold, which experienced a small price increase last week, and is well below its summertime high of $1900+ in early June. 

    • In summary, equities dipped, along with oil, and the safe haven of gold rose.

      As the election nears and more clarity emerges, expect additional analysis regarding investing and taxation, and their effects on retirement planning.

What’s ahead for this week?

  • In Canada, wholesale trade, and employment, payrolls and hours, and the industrial price index for July are scheduled to be announced.  For equity investors the major banks will be releasing their latest quarterly results.

  • In the U.S., July’s new and existing home sales, wholesale and retail inventories, durable goods orders, and personal income and spending will be released.  On Friday Federal Reserve Chair, Jerome Powell, will deliver remarks as the annual Jackson Hole Symposium concludes.  Expect the markets to react should he indicate, even obliquely, any changes to their near-term plan of holding bond purchases and interest rates steady.

  • Globally, Purchasing Managers Indices for Japan and the Eurozone will be released along with Europe’s consumer confidence and money supply, and Germany’s Gross Domestic Product and retail sales.

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?

  • U.S. consumer inflation rate for July was released this past week. 

    • Prices rose 5.4% higher than the previous year. 

    • The core inflation rate that excludes food and fuel rose 4.3%, which was slightly lower than June’s year-over-year increases. 

    • Categories that are closely associated with reopening, and have had large increases in previous months, have slowed their rise and in some cases retreated. 

    • Overall, the increases were in-line with expectations and the slowing of price increases is excellent news.

  • The Federal Reserve is watching inflation very closely and has portrayed that these larger than desired inflation numbers as temporary and would moderate quickly.  It appears that the Fed has been correct, and its watching-and-waiting approach to monetary policy changes has been prudent. 
  • Equity markets have responded favourably with new highs achieved for major indices in the U.S. and Canada.  Despite a small loss for the NASDAQ last week, the major indices have risen 15% to 19% in 2021.  MSCI’s All-Country World Index (ACWI) has gained nearly 14% over the same period, which is remarkable with the inconsistency of economic recovery based on vaccination rates around the world.
  • Another positive contributor for equity markets in North America last week was the predicted increase in fiscal spending by the U.S. federal government.  The Senate passed a bipartisan infrastructure bill as a larger $3.5 Trillion package is pursued by Democrats, causing additional negotiation and perhaps delay.
  • In Canada, the spending continues to accelerate by the governing Liberals.  The trend could be in jeopardy if their negotiated mandate with the NDP ends following the next election.

What’s ahead for this week?

  • In Canada, last week’s light calendar for economic announcements rebounds with a full slate, including June’s manufacturing sales, wholesale trade, new orders and retail sales, July’s housing starts and existing home sales.

  • In the U.S., after last week’s important news regarding domestic inflation, the calendar is lighter with July’s retail sales, industrial production, housing starts, and Federal Reserve meeting minutes scheduled for release.

  • Globally, production and inflation will dominate the news with China’s retail sales, industrial production, Japan’s real GDP, inflation, trade balance and industrial production and the Eurozone’s real GDP and inflation scheduled.

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 strong week for equities compared to commodities; Canada’s TSX, America’s S&P 500, Dow, and NASDAQ, and the global MSCI All-Country World Index each gained 1% over the past five-day trading session. 

  • Gross Domestic Product (GDP) and employment expansion continues to drive equity market gains.  In the U.S. GDP has grown 6.4% during 2021, and Canadian GDP has grown by more than 5% in the first quarter as we await Q2 GDP numbers domestically.  July job growth has been strong in both countries with 94,000 new jobs in Canada and 943,000 in the U.S.  The unemployment rate in Canada has fallen to 7.5% and 5.4% in the U.S.

  • Strong jobs growth combined with increasing wages could drive inflation concerns. This week, China, Germany, U.S., and Canada will announce inflation numbers for July, and we will see whether these concerns are justified, and eventually whether monetary policy will be affected.  For the near future it appears that bond-buying programs and interest rates will be held steady by central banks around the world.

  • Should inflation numbers be higher than expected (or above the desired range set by central bankers) most analysts believe that action will be delayed until the impact of the delta variant of Covid-19 is known.  As we wait, the measures in-place by the Bank of Canada, the Federal Reserve and other banks will continue to support equities markets.

What’s ahead for this week?

  • In Canada, producer inflation will be the lone indicator of importance on the economic release calendar.

  • In the U.S., job openings and labor turnover for June is scheduled for release and second quarter productivity.  July’s consumer and producer inflation will be announced.

  • Globally, the Tokyo Olympics concluded on Sunday and Japanese markets will be closed on Monday.  China will release its latest inflation numbers through the Consumer and Producer Price Indices.  Germany will also release its inflation data.

 

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?

  • Corporate results held investors’ attention last week in both New York and Toronto as the busiest week for quarterly reporting occurred. 

    • The results have been very strong in the U.S. as nearly 90% of firms have beaten estimates by nearly 20%. 

    • Technology companies led the way with Google, Amazon, Apple, Microsoft, Facebook and Shopify delivering solid profitability and profit growth compared to last year. 

  • Federal Reserve Chair, Jerome Powell, announced that both interest rates and bond-buying programs would remain unchanged following the meeting of the Federal Open Market Committee.  The dual mandate of managing inflation and maximizing employment continues to require $120 Billion in bond purchases monthly and its benchmark interest rate, the federal funds rate, to remain at a range of 0 to ¼ percent.  (Source)
  • Canadian inflation slowed somewhat in June compared to May, down to 3.1% from 3.6%. 
    • The core inflation rate also improved and sits at 2.2%.  Like the Federal Reserve, the Bank of Canada will closely monitor inflation levels and respond with monetary actions like interest rate increases should they feel price increases are more permanent than the conditions caused by reopening like supply chain shortages and releasing pent-up demand. (Source)

What’s ahead for this week?

  • In Canada, markets were closed on Monday August 2nd for the observance of mid-summer holidays.  Markit’s Purchasing Managers Index (PMI) for July will be released.  Additionally, building permits, merchandise trade balance, and employment figures for July will be announced.

  • In the U.S., both Markit and ISM will release their manufacturing and services PMIs for July, along with non-farm payroll numbers.  June construction spending, factory orders, ADP’s national employment report, goods and services trade deficit, and wholesale inventories.

  • Globally, manufacturing and services PMIs for China, Japan and the Eurozone for July will complete the purchasing managers’ view of recovery.  Two other important measures, Japan’s household spending and Germany’s industrial production 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?

  • Last week in the markets, gold was the only loser as all of the other indicators increased in value.  The TSX and Dow each gained a little more than 1% as the S&P 500 and NASDAQ gained, 2% and 3%, respectively. 

    • The positive finish for the week belies the turmoil that preceded the strong finishes for equity indices.  The Dow started the week by dropping 2% on Monday.  By the close of markets on Monday the S&P 500 and TSX had dropped about 3% in less than a week.  By the end of the week the U.S. indices had not just recovered, they touched all-time highs.

  • The expectation that volatility will rise as we emerge from the pandemic materialized last week. 
    • The prevalence of the Delta variant of the virus has caused increased cases in many nations.

    • Vaccination rates vary dramatically between nations and are, generally, slowing in the U.S., particularly outside major cities. 

What’s ahead for this week?

  • In Canada, inflation data for June will be released by StatsCan through the Consumer Price Index.  May’s Gross Domestic Product (GDP) will represent the overall economic rebound as vaccination rates were climbing and reopening was being carefully managed six to ten weeks ago.

  • In the U.S., June’s new home sales, durable goods orders and pending home sales will be announced.  GDP for the second quarter will be released along with July’s consumer confidence.  On Wednesday, the Federal Reserve announcement will be immediately followed by a press conference with the Fed’s Chair, Jerome Powell.

  • Globally, the upcoming week’s calendar includes Japan’s manufacturing purchasing managers index and jobless rate, Germany’s consumer confidence, unemployment and CPI.  Also, several indicators for the Eurozone will be announced and include economic and consumer confidence, GDP, CPI and employment 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?

  • On Wednesday the Bank of Canada held its benchmark interest rate unchanged at ¼%, as the country and world continue to emerge from the pandemic.  The central bank does not expect to raise rates until the second half of 2022 at the earliest, even as variants of concern continue to rise and virus containment is not universal. 

  • The two themes discussed in detail at the press conference were increased confidence and continued attention.  Governor, Tiff Macklem, mentioned falling case counts, progress on vaccinations and easing measures as evidence of recovery and an expectation for its continued momentum.  Also, on-going scrutiny must be applied to the “dynamics of recovery and inflation”. 

  • As expansion continues, the Bank’s forecast for inflation has been increased.  Bank of Canada economists believe that the rate will be above 3% for the balance of 2021, before nearing the Bank’s target of 2% during 2022, rise again in 2023 and then back to 2% in 2024.  The belief is that pent-up demand is outstripping decreased supply temporarily.  When supply rebounds inflation is expected to slow, and more typical price increases will return. 

  • American consumer inflation rose to 5.4% in June, the highest year-over-year price increase for a month since 2008 during the financial crisis.  Prices of goods and services fell during the early months of the pandemic, and June 2021 price spikes are being compared against the lows of June 2020.  Despite the high rate of inflation, the Federal Reserve has also left rates unchanged. (Source1, Source2, Source3)

What’s ahead for this week?

  • In Canada, it will be a light week for economic announcements with Aprils’ household credit, retail sales for May, and housing prices for June as the major announcements.

  • In the U.S., housing starts, new house prices, existing home sales are scheduled for announcement.  Also, the Purchasing Managers Indices from Markit for the month of July will be released.

  • Globally, the light week for economic news continues.  The major releases on the calendar are Japan’s inflation numbers and trade balance, and the Eurozone’s consumer confidence.  On Thursday the European Central Bank will conduct a Monetary Policy Meeting that will discuss the effects of the pandemic, the recovery, the vaccination program and recent weather events on the region’s economy.

 

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 strong week for North American equities.  Even though U.S. markets were closed for the Independence Day festivities on Monday, there were modest gains on the Dow and NASDADAQ, while the S&P 500 achieved another new, all-time high.  Canada’s TSX repeated the previous week’s performance by treading water again.  Last week’s gain of 0.16% easily reversed the preceding loss of 0.02% from the week ending July 2nd.

  • Negative news has been neutralized by Canadian jobs growth. 

    • Jobs rebounded well in June as expansion and recovery continued as re-opening moved forward.  230,000 new jobs were added last month after losing 63,000 jobs in May. 

    • The unemployment rate has been falling slowly, but unfortunately it is as much a reflection of lowering of job seekers as job finders.  The second half of the year it is traditionally a time of a strong job market (summer employment and holiday season hiring, for example).  As more people re-enter the job market the seasonal hiring increases should hold the unemployment rate steady or continue its slow decline. 

    • Despite the uncertainty associated with pandemic’s lingering effects a strong second half to the year for jobs growth and productivity.

  • The recovery of Gross Domestic Product (GDP) in North America has been impressive.  Once restrictions began to lift, pent-up demand and access to goods and services has moved economic indicators ahead briskly.  The drivers have been the spending of savings of individuals caused by deferred purchases and the spending of government payments to individuals.  The expectation is that consumer spending, which comprises about two-thirds of GDP, will continue to power economic expansion as the recovery continues

What’s ahead for this week?

  • In Canada, industrial inflation, manufacturing sales, housing starts, and existing home sales numbers will be released.  On Wednesday the Bank of Canada will release its latest Monetary Policy Report.

  • In the U.S., June consumer and producer inflation data for June will be released along with retail sales.  Consumer inflation is forecast to rise 0.4% from May which would quell worries for interest rate rises to stifle inflation.

  • Globally, China will release its trade surplus figures, retail sales, industrial production and second quarter Gross Domestic Product, Germany, UK, France and the collective Eurozone will all announce their inflation data.

 

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.