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(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 an extremely difficult week for markets with equity indices in Canada, the U.S. and globally falling along with the Canadian dollar, gold and oil. 

  • Positive news on the jobs front suggests that the Bank of Canada and the Federal Reserve may act more quickly to raise interest rates to reign-in inflation.  Fears of an economic slowdown associated with higher rates was bolstered by uncertainty of the Omicron variant, which has caused several countries to enact restrictions.

  • The latest jobs data was released with 154,000 jobs added in Canada.  The unemployment rate fell again by 0.7% to 6.0%.  Employment exceeds the February 2020 level by 186,000 jobs and the unemployment is just 0.3% below its level at that time.  Total hours worked increased by 0.7% and have returned to pre-pandemic levels.  The ending of support programs in Canada was seen as a contributor as more individuals sought to move to earned income.  More than 80% of women aged 25 to 54 were employed in November, which is the highest level since the data was first collected in 1976, with growth spread across multiple industries.  By comparison 87% of men of the same age are employed, exceeding February levels by 0.5%. (Source1, Source2, Source3)

  • In the U.S., 210,000 new jobs were added in November and the unemployment rate fell by 0.4% to 4.2%.  “Notable job gains occurred in professional and business service, transportation and warehousing, construction and manufacturing.  Employment in retail trade declined over the month” according to the report released by the Bureau of Labor Statistics.

What’s ahead for this week?

  • In Canada, merchandise trade balance and third quarter capacity utilization will be announced.  The most important update of the week will be the latest release of the Bank of Canada’s monetary policy.

  • In the U.S., third quarter productivity, October’s goods and services trade deficit and consumer credit, and November’s Consumer Price Index (CPI) will be released.

  • Globally, China’s trade surplus, CPI and producer inflation, Germany’s factory orders and CPI, industrial production will be announced along with Eurozone real Gross Domestic Product.

For more information contact: [email protected]

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.


November 22-26: 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?

  • North American equity indices dropped more than 2% on Friday and drove the grid above to another pandemic-related “all red” week due to fears that renewed domestic restrictions and lockdowns, as well as curtailing the movement of people, raw materials and finished goods could damage the pace of economic recovery.  Global equities represented by MSCI’s All Country World Index (ACWI) was down almost 3% for the week.  The price of West Texas Intermediate (WTI) oil fell by more than $10/barrel and more than 13% on Friday.  Gold held steady on Friday, gaining $1.20 per ounce, which demonstrated its value as a ‘safe haven’, at least for a day.

  • These one-day losses (except for gold) followed the observance of Thanksgiving across the U.S. and continued the tradition of a light trading day with volumes down more than 20% compared with the previous Friday.  This would have been the second consecutive “all red” week had S&P 500 lost value last week.  Two consecutive weeks where all our indicators have lost value has not happened in 2021 and not since the darkest days of the pandemic. 

  • Despite the recent setbacks equity indices in North America are up 14-22% in 2021 and 17-28% from a year ago.

What’s ahead for this week?

  • In Canada, building permits, industrial product and raw materials price indexes for October will be released.  November’s employment report is scheduled along with real GDP for the third quarter.

  • In the U.S., October’s pending home sales, construction spending, factory orders, wage rate and the employment report for November will be announced. 

  • Globally, Germany and the Eurozone will announce their latest data on employment, inflation and consumer confidence.  OPEC+ will conduct another meeting in response to the recent variant news from Africa and the release of strategic oil reserves by several governments to lower the price of oil to soften inflation.

For more information contact: [email protected]

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 mixed with the TSX and Dow losing 1% or more while the S&P 500 and NASDAQ made gains.  The drop in Canadian equites rested largely on the drop in the price of oil.  Energy is the second largest sector comprising the TSX after Financials.  The Canadian dollar also dropped three-quarters of a percent, magnifying the losses in Canadian dollar denominated equities.

  • Much of the negative momentum was propelled, by domestic inflation as October’s Consumer Price Index rose 4.7% over the same period in 2020.  Transportation costs, including gasoline, was a major contributor, however, the recent reduction in the price of oil may help.  Food and housing are continuing their rise as well.  Thankfully inflation is well below the U.S. rate of 6.2%, but this is the highest rate increase for Canadian prices in more than 18 years.

  • The inflation rates on both sides of the border are driving increased speculation that the Bank of Canada and the Federal Reserve will act to increase their benchmark lending rates to cool inflation.  Both central banks have set the average inflation target at 2%, and nearly 5% and more than 6% in Canada and the U.S., respectively, are well beyond the goal.  Early analysis suggested that increased inflation rates were merely temporary as reopening expanded, but price increases are persisting and it appears that it may be well into spring of 2022 before prices become more stable. (Source)

What’s ahead for this week?

  • In Canada, September’s budget balance for the federal government and October’s wholesale trade and manufacturing sales are on the economic release calendar.

  • In the U.S., Thanksgiving will shorten the trading week with markets closed on Thursday.  New and existing home sales, goods trade deficit, durable goods orders, personal spending and income, wholesale and retail inventories for October will be announced.  Also, the Purchasing Managers Indexes (PMIs) from Markit for November and third quarter real Gross Domestic Product (GDP) will be released.

  • Globally, Eurozone and Japanese PMIs that signal purchasing managers’ optimism will be released along with Germany’s consumer confidence, real GDP and business climate survey.

For more information contact: [email protected]

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?

  • In a week where bond markets closed on Thursday for the observance of Remembrance Day, the TSX gained while the S&P 500, the Dow and NASDAQ all lost ground.  The TSX has returned almost 25% in 2021 and has edged ahead of the S&P 500 and NASDAQ in year-to-date returns.

  • Equities in the U.S. have been negatively affected by the recent release of consumer and producer inflation numbers.  The Consumer Price Index (CPI) has risen to 6.2% in October and the Producer Price Index (PPI) is at 8.6% in the U.S.  The CPI last reached this level in 1990 and it has been more than a decade since the PPI has been this high.  The Canadian inflation rate will be updated on Wednesday but had been trailing the U.S. at 4.4% in September.  Prior to the pandemic and since 2010 inflation in Canada and the U.S. had averaged 1.6%.

  • Both countries’ inflation rates are well above the desired long-run average of 2%.  In theory, inflation would hover at or near 2%, with equal amounts of time spent above and below the goal of 2%.  When the rate exceeds four, five and six percent, the goal can only be achieved after sustained periods under the goal. 

  • It appears that the U.S. Federal Reserve and the Bank of Canada will be pressured to raise interest rates sooner than were anticipated only a few weeks ago as inflation appears to be more persistent than transitory. (Source1,
    Source2)

What’s ahead for this week?

  • In Canada, September retail sales, manufacturing sales, new orders and wholesale trade, , will be announced.  Existing home sales, housing starts and new housing price index for October will be released along with consumer inflation for the same period.

  • In the U.S., October data will be released for several economic indicators including retail sales, import prices, industrial production, capacity utilization, business inventories, housing starts and building permits.

  • Globally, Gross Domestic Product growth and inflation, through their respective CPIs, will be released for Japan, the Eurozone.  China is scheduled to release its retail sales and industrial production.

For more information contact: [email protected]

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?

  • Following last week’s action by the Bank of Canada to eliminate its bond-buying program, the U.S. Federal Reserve (Fed) took a similar and more protracted approach. Both are reducing support for economic recovery to curtail inflation. Additionally, the temporary nature of price increases is being questioned.  As a result, the Federal Reserve will reduce bond purchases by $15 Billion/month from the current $120 Billion/month total.  If this reduction schedule holds, the bond-buying program (known as quantitative easing) will end in June of next year.  The purchases of bonds help to stimulate economic activity by reducing long term interest rates.  Fed Chair, Jerome Powell, indicated that short term interest rates would remain unchanged.  A video of Powell’s announcement is available here.

  • Canada added 31,000 jobs in October and the unemployment rate fell to 6.7%.  September reported nearly five times as many jobs, which may indicate a softening of employment results.

  • In September the U.S. economy underperformed in job creation and has since rebounded by adding 531,000 jobs in October, lowering the unemployment rate to 4.6%.  The American wage rate has increased by 4.9% compared to the same period last year.  Rising U.S. wages along with more persistent housing costs and food prices may have contributed to the Fed’s decision to slow its bond purchasing program to temper inflation.

What’s ahead for this week?

  • In Canada, the economic announcements scheduled are not significant for most retail investors.  Bond markets in Canada (and the U.S.) will be closed on Thursday for Remembrance Day.  It will be an important week for earnings results as several Real Estate Investment Trusts (REITs) will be announcing their performance figures.

  • In the U.S., the most recent inflation numbers will be released through the announcement of the Consumer Price Index.  Wholesale inventories will be announced and the Chair of the Federal Reserve, Jerome Powell, will be speaking at several conferences and will likely comment on the Fed’s decision from last week.

  • Globally, China will announce its inflation numbers for both consumers and companies as their CPI and Producer Price Index (PPI) are released.  Germany will also release its CPI.

For more information contact: [email protected]

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 TSX was the only major North American equity index to lose ground last week.  Even with some high-profile earnings disappointments, like Amazon and Apple, the U.S. indices including the NASDAQ, made strong gains.

  • The most significant negative news for the TSX and most Canadian investors was the announcement by the Bank of Canada that their quantitative easing program of bond-buying would be ending. 

  • Secondarily, the forward guidance that an interest rate increase is predicted for the middle of 2022, not the end of next year, further lowered expectations..  This move and guidance are based on the growing realization that inflation in Canada (and the U.S.) is not as temporary as first suspected.

  • Bond-buying can lower the long-term borrowing rate for businesses and households and may encourage and allow for major investments and purchases that contribute to economic recovery.   Dialing the quantitative easing program back to zero is designed to reduce overall demand and upward price pressures, but may also cause a reduction economic growth.  With the short-term rate at its lowest possible level of ¼%, the ability to spur economic growth with short term rates does not exist, so the Bank of Canada has decided to raise long-term rates now. (Source1, Source2)

What’s ahead for this week?

  • In Canada, October’s manufacturing Purchasing Managers Index (PMI) from Markit, building permits and merchandise trade balance will be released.  The employment report for October is scheduled for Friday.

  • In the U.S., Markit and ISM will announce their manufacturing and services PMIs, along with construction spending, factory orders.  The Federal Reserve will announce its latest monetary policy following the Federal Open Market Committee’s meeting midweek. 

  • Globally, the Eurozone, China and Japan will release their manufacturing and services PMIs, too.  Germany’s factory orders, industrial production and retail sales are on the calendar.  OPEC+ will hold another meeting amid continued increases in the price of oil.

For more information contact: [email protected]

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 TSX and Dow reached new all-time highs last week.  The TSX has had an unbroken series of thirteen daily gains: last losing value on October 4th.

  • Overall inflation rate for September was 4.4%, compared with the U.S. rate of 5.4% for the same period.  The assumption that current inflation is temporary and related directly to the reopening and recovery of economies is beginning to be questioned.  When food, shelter and transportation prices rise, 3.9%, 4.8% and 9.1%, respectively, concern also rises.  Eventually inflation will pressure central banks like the U.S Federal Reserve and our Bank of Canada to slow price increases by slowing economic growth. (Source1, Source2)

  • Evergrande, China’s massive housing builder, continues to struggle with debt repayment issues ($300 Billion) and links to a housing bubble in that country as China’s Gross Domestic Product (GDP) growth stagnates. 

What’s ahead for this week?

  • In Canada, wholesale trade and the raw materials price index for September and two very important indicators for August, the employment report and real GDP, will be announced.  On Wednesday the Bank of Canada will release its latest monetary policy announcement.

  • In the U.S., September’s goods trade deficit, wholesale and retail inventories, durable goods orders, pending home sales and new home sales will be announced.  Personal spending and real GDP, also for September, will be the most noteworthy economic indicators released this week.

  • Globally, GDP, business climate, consumer confidence, unemployment and consumer inflation will be released for Germany.  Eurozone figures for GDP, inflation, consumer confidence and money supply are scheduled to be announced. 

For more information contact: [email protected]

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 very positive week in the markets:

    • Equities rose 1.5% to 2.5% with the major indices approaching or setting new 52-week highs. 

    • The Canadian dollar rose along with the price of oil.  Oil has doubled in the past year, which is good news for Energy investors, but will increase consumer and producer inflation. 

    • Gold, which gained last week, is still down more than 7% in the past year. 

    • The positive performance for stocks and oil was achieved despite the mixed news that was announced:

      • The International Monetary Fund (IMF) released its “World Economic Outlook” with the headline “Global recovery continues, but the momentum has weakened, and uncertainty has increased”.  The slowdown has been attributed in part to supply disruptions in advanced economies and worsening pandemic conditions in developing countries. (Source)

      • Consumer inflation rose 5.4% in September. The Federal Reserve has been maintaining that the higher inflation rate situation is temporary.  Concern is growing that inflation may not be as transitory as hoped based on recent data from the housing market. 

      • Expectations to taper Federal Reserve bond purchases, which would increase the cost of long-term borrowing is continuing to grow.  The move to taper is being driven by increasing inflation, but also potentially delayed by stalling Gross Domestic Product and employment numbers.  Based on the Fed’s announcements an increase to the benchmark interest rate is not expected until 2022 or 2023. (Source)

What’s ahead for this week?

  • In Canada, September inflation through the Consumer Price Index will be released, which will heavily influence Bank of Canada actions.  The central bank’s Business Outlook Survey, housing starts, manufacturing sales are all on the calendar.

  • In the U.S., industrial production, capacity utilization, building permits and housing starts and existing home sales for September will be released.  A number of Purchasing Managers Indexes (PMIs) that predict upcoming business and wholesale activity are also on the schedule.

  • Globally, important economic indicators from China will be announced with real Gross Domestic Product, trade balance, retail sales and industrial production scheduled for announcement.  Japan’s CPI and Eurozone inflation and consumer confidence will also be announced.

For more information contact: [email protected]

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?

  • 157,000 jobs were added in Canada last month, exceeding the expectations of analysts.  The unemployment rate fell to 6.9%, the lowest level since the pandemic began in March of 2020.  Companies are still looking to hire more workers and 400,000 people have not rejoined the workforce. (Source)

  • In the U.S. 194,000 jobs were added in September, which is the lowest monthly increase in 2021 and well below the estimated number of new jobs for the month.  Unemployment is down to 4.8%, the lowest level since the pandemic began. As workers delay their return-to-work, wages have increased nearly 5% since 2020. (Source)

  • The disappointing results in the U.S. job market may delay the Federal Reserve’s move to taper its bond-buying program.  Despite the mixed news for jobs, the anticipation of the Fed’s response moved equity markets upward last week. 

  • Increasing energy prices did not weigh down equity markets.  The price of oil increased an additional 5% last week and has nearly doubled in the past year.  It is now at its highest level in 7 years.  Economic output is being negatively affected in China and Europe as energy shortages are occurring widely.  OPEC+ agreed to increase output in an effort to reign in prices, increase their revenues and allow recovery to continue. (Source

What’s ahead for this week?

  • In Canada, markets were closed on Monday for Thanksgiving.  Reports being released tis week include August’s manufacturing sales, industrial production, wholesale trade, and September’s existing home sales on the schedule.

  • In the U.S., bond markets were closed on Monday for Columbus Day.  Inflation for September via the Consumer Price Index (CPI), U.S. Federal Reserve minutes from Sept 21-22, retail sales, import prices and business inventories are scheduled for release this week.

  • Globally, China’s trade surplus, CPI, Germany’s CPI, Eurozone and Japan’s industrial production are on the calendar.

For more information contact: [email protected]

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?

  • All of the major indices suffered losses, especially the technology-heavy NASDAQ that dropped more than 3% last week.  Most of the news negatively affecting equity markets last week emanated from the U.S. 

    • The negotiations in Washington over the debt ceiling and the infrastructure bill dragged on past the end of the week and into the weekend.

      • The House of Representatives passed measures on Thursday evening, just prior to the deadline, raising the debt ceiling until early December when the same type of posturing and politicizing will return.  The threat to the AAA rating the U.S. holds for debt is threatened each time this ceiling is negotiated.

      • The massive $3.5 Trillion infrastructure bill proposed by President Biden is stalled in the House and will now be discussed and debated after his social policy package is passed by the Democrat-controlled Congress. 

        • Progressives within the Democrat ranks have blocked approval of the infrastructure bill and have created a rift within the party as legislative delays persist.

    • The Federal Reserve, and by extension the Bank of Canada, appears poised to allow long term interest rates to rise as the bond-buying measures will likely be tapered soon. 
  • The good news is that short-term interest rates are not expected to be changed by the Fed or other central banks soon; forecasts are placing that action about one year away.

What’s ahead for this week?

  • In Canada, data will be released for building permit and trade balance for August. The September employment report will be released, where 60,000 new jobs are expected along with the unemployment rate falling to 6.9%.

  • In the U.S., August wholesale trade, factory orders, trade balance, and consumer credit will be announced.  Purchasing Managers Indices from ISM will be released along with the U.S. jobs report for September where nearly 500,000 new jobs are expected, and the unemployment rate should fall to 5.1%.

  • Globally, markets in China will be closed until Friday to observe its National Day and Golden Week.  OPEC+ will hold a meeting via videoconference.  Eurozone retail sales, Germany’s factory orders, trade surplus and industrial production will also be released. 

For more information contact: [email protected]

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.


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