ClearWater Market Commentary as of May 3rd, 2021

Here is the ClearWater Market Commentary as of May 3rd, 2021:

In this issue:
– Performance of Major Indices
– Market Commentary
– Last Week’s Key Economic  
  Events and Upcoming Events

Performance of Principle Indexes: 

S&P/TSX Composite Index
5 Day	0.03%
1 Month	0.62%
YTD	9.61%
1 Year	30.70%

^{As of 2021/04/30 – Source: www.marketwatch.com}

Index Performances	Last 5 Days	YTD
Oil ($/bbl)	2.20%	30.80%
Shanghai Composite	0.17%	-0.75%
S&P/TSX Composite	0.03%	9.61%
Russell 2000	-1.42%	14.71%
Nasdaq	-1.42%	8.34%
FTSE 100	-1.48%	5.18%
S&P 500	-1.71%	7.12%
Hang Seng Index	-1.77%	4.44%
CAC 40	-1.96%	6.92%
Dow Jones Industrial	-2.22%	6.51%
DAX	-3.06%	3.92%
Nikkei 225	-3.62%	4.55%

^{As of 2021/04/30}

Last week’s and next week’s key economic events:
 

US economy (S&P 500 -1.71%):

• North American equities pushed to new highs but than retreated to finish the week flat. This was amid solid corporate earnings reports, plans for massive additional US Policy stimulus, accelerating economic growth and a renewed pledge by the US Federal Reserve to remain accommodative despite a pick-up in inflation pressures.
• The Fed Chair Jerome Powell referred to the “frothiness” in equity markets but promised that rate increases are not on the horizon.
• Of the little more than half of the S&P 500 companies that have reported earnings so far, 87% are beating estimates by a historically elevated 24% rate. Rising corporate earnings will continue to be a key underpinning of rising stock prices.
• President Joe Biden unveiled the US$1.8 Trillion American Families Plan, which focuses on education, childcare and expanding the social safety net. This follows the proposed US$2.3 trillion infrastructure-focused American Jobs Plan and the $1.9 trillion American Rescue Plan signed in March.
• Following the strong first-quarter growth, economic activity is now only 1% below its peak and on track to fully return to the pre-pandemic levels this quarte, an outcome considered almost impossible just six months ago.
• Weekly jobless claims also fell to a pandemic-era low of 553,000.

Canadian markets (S&P/TSX 0.03%):

• The forecast of Canada’s gross domestic product (GDP) growth continues to show a more vigorous recovery than had been expected.
• Canada’s retail sales in February were much higher than original estimates.
• The energy sector also had a strong week, as West Texas Intermediate crude prices crept toward a three and half year high after Russia and members of the Organization of Petroleum Exporting Countries (OPEC) signaled confidence in the demand outlook.
• The Bank of Canada also recently announced that it will be paring back its bond purchases, an initial step in reducing the level of monetary stimulus.

Performance 2021: S&P 500/400/600 Sectors

European and Asian economies:

• European stock markets were mixed, as the euro area officially re-entered recession. However, despite the contraction in Europe’s economy in Q1, there are reasons for optimism.
• Confidence measures in most countries climbed. Especially in Spain as hopes remain high for the return of tourism. Rollouts of vaccination campaigns continue, sentiment in manufacturing continues to strengthen, and its forecasted that as household spending continues to increase there will be strong support for the economic recovery when restrictions are hopefully lifted later this year.
• Germany’s DAX index did fall though after reports said the country’s current lockdown may be extended until the end of May. France however is set to start easing lockdown restrictions.
• More than 133 million doses of COVID-19 vaccines have been administered across 30 European countries, and EU has concluded negotiations with Pfizer and BioNTech, securing an additional 1.8 billion doses of their vaccine through 2023.
• Asian markets all dipped at week’s end in response to weaker-than-expected purchasing managers’ indices in China and a broadening antitrust crackdown on China’s technology giants.
• China’s tech sector remained under a regulatory cloud after Beijing imposed wide-ranging restrictions at 13 well-known internet companies.
• Japan’s stock markets also finished lower. Worse-than-expected earnings releases exerted downward pressures on markets.

What to watch this week:

Canada

• Markit Manufacturing Purchasing Managers’ Index (April)
• Building permits (March)
• Int’l. merchandise trade (March)
• Employment report (April)

U.S.

• Markit, ISM Purchasing Managers’ Indices (April)
• Construction spending (March)
• Trade balance (March)
• Durable goods orders (March)
• Employment report (April)

• 

Sources: Bloomberg.com,Yardeni.com, Barron’s.com, Factset.com and Newyorkfed.org

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