ClearWater Market Commentary as of August 16, 2021

Here is the ClearWater Market Commentary as of August 16, 2021:

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

Performance of Principle Indexes: 

^{As of 2021/08/13- Source: www.marketwatch.com}

^{As of 2021/08/13- Source: www.marketwatch.com}

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

US economy (S&P 500 0.80%):

• The U.S. market gained ground with the market shrugging off the renewed spread of the coronavirus and its possible implications for future economic activity. Most sectors advanced, lead by materials.
• Energy stocks slipped on concerns that oil producers discipline’ on the supply side and worries that the upsurge in coronavirus infections could weigh on global demand.
• In a light week for U.S. economic data releases, all eyes were on the latest inflation numbers from the Bureau of Labor Statistics. The Consumer Price Index (CPI) increased 0.5%, the smallest month over month increase since March. This slowdown inflation appears to support the prevailing narrative that increases in consumer prices should be transitory as the economy works through its bottlenecks.
• The Senate passed a roughly USD 1 Trillion bipartisan infrastructure package, including about USD 550 billion in new spending, that aims to rebuild traditional transportation infrastructure, improve access to broadband internet in rural areas, and upgrade the electric grid and water systems.

Canadian markets (S&P/TSX 0.39%):

• Gains in the industrial and financial sectors helped lead Canada’s main stock index higher last week.
• The current situation with rising COVID-19 cases has left a feeling of uncertainty around which direction the Bank of Canada will take around interest rate changes.
• Canadian inflation number set to come out this week could begin to give the market a reason to move one way are another.
• Prime Minister Justin Trudeau also called a snap federal election in a bid to regain a majority in the House of Commons.

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

European and Asian economies:

• Shares in Europe advanced as investors focused on the economic recovery and shrugged off worries about surging coronavirus infections in key markets and signs of slowing growth in Asia.
• The UK FTSE 100 Index rose on strong corporate earnings and the British pound’s decline relative to the US dollar. UK stocks tend to gain when the pound falls because many companies that are part of the index are multinationals with overseas revenues.
• The number of coronavirus cases in the European Union EU and the European have stabilized and are declining in the UK.
• The UK economy expanded by 4.8% sequentially in the second quarter, driven by a rise in household consumption as lockdown rules were lifted.
• Japan’s stock market registered modest gains for the week. The country’s deteriorating coronavirus situation kept risk appetites in check as pressure grew on the government to tighten restrictions further.
• Japan’s Prime Minister Suga outlined some of the country’s economic policy priorities. He spoke to deregulation being key to breakthrough to the next stage of growth, and that green and digital themes will have to go hand in hand.
• China stocks recorded modest gains despite worries that increased government oversight of the country’s technology and private education industries would spread to other sectors.
• On Wednesday, China released a five-year blueprint calling for increased regulation affecting key parts of the economy. On the economic front, China reported that total social financing – a broad measure of new credit in the economy – rose 10.7% year over year.

What to watch this week:

• Canadian and US housing data
• Canadian, US and Chinese retail sales data
• US monetary policy announcement
• US, Japanese and Chinese industrial production data
• Eurozone and Japanese GDP data
• UK employment and consumer confidence data
• Japanese trade data
• Chinese fixed-asset investment
• Global inflation data
• 19 S&P 500 and 2 S&P/TSX companies report earnings

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

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