ClearWater Market Commentary as of August 9, 2021

Here is the ClearWater Market Commentary as of August 9, 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	0.92%
1 Month	1.20%
YTD	17.45%
1 Year	23.31%

^{As of 2021/08/06- Source: www.marketwatch.com}

Index Performances	Last 5 Days	YTD
CAC 40	2.13%	22.81%
Russell 200	1.39%	13.75%
DAX	1.17%	14.81%
S&P 500	1.13%	18.12%
Dow Jones Industrial	1.07%	15.04%
Nasdaq	1.05%	15.11%
S&P/TSX Composite	0.92%	17.45%
Shanghai Composite	0.88%	0.62%
FTSE 100	0.49%	10.15%
Hang Seng Index	0.18%	-3.48%
Nikkei 225	0.14%	1.37%
Oil ($/bbl)	-0.80%	40.30%

^{As of 2021/08/06- Source: www.marketwatch.com}

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

US economy (S&P 500 1.13%):

• The major indices recorded gains for the week, helping the large-cap benchmarks and the technology-heavy Nasdaq reach new highs.
• The week did start off on a down note, mostly amid concerns around “peaking” economic growth and profits, along with worries about the delta variant of the coronavirus. There has also been some worries around the new regulatory measures in China.
• Positive earnings however surprised the market and led to a rebound. Analysts are predicting that second-quarter earnings for the S&P 500 to increase by up to 85% versus the year before.
• The closely watched monthly payrolls report seemed to provide the markets another leg up, as on Friday it indicated that 943,000 jobs were added in June, well above consensus estimates. Also the best showing since strict lockdowns were eased last Summer. The unemployment has also falling much more than expected to 5.4%, a new pandemic-era low.

Canadian markets (S&P/TSX 0.92%):

• Canada’s main stock index closed at a record high on Friday as financial and energy stocks rose and the unemployment rate dipped. The gains came as jobs numbers showed a continued recovery, even as they fell below expectations.
• Canadian employment (Jul.) rose (94,000 versus 150,000 expected, down from 237,000). This month’s gain was milder than expected, but the underlying details are positive. Full-time positions were up a solid 83,000 and the advance was broad-based, once again led by the hospitality sector. The unemployment rate
  dipped to 7.5% (versus 7.4% expected, down from 7.8%), while the participation rate held steady at 65.2%.
• Cyclical stocks are continuing to do well as jobs, mainly in the leisure and entertainment areas, come back.
• Canada’s merchandise trade balance (Jun.) turned into a $3.2 billion surplus (versus a $0.6 billion deficit expected), following a downwardly-revised $1.6 billion deficit last month. A 8.7% surge in exports, led by a 23% spike in energy exports, boosted the trade balance into positive territory.

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

European and Asian economies:

• Shares in Europe rose on strong growth in corporate earnings and optimism about an economic recovery.
• Germany has advised to continue COVID controls, and the UK has started its plans to vaccinate teenagers.
• The Bank of England has indicated that “some modest tightening of monetary policy over the forecast period is likely to be necessary” should the market to continue to evolve in line with the bank’s projections. The Bank has left its monetary policy and quantitative easing program unchanged at its latest meeting, and has indicated they don’t foresee a interest rate hike until 2022.
• Japan’s stock markets made gains over the week due to upbeat earnings reports. However, gains were dented by the worsening coronavirus situation.
• The International Monetary Fund (IMF) also downgraded Japan’s 2021 growth prospects for the year.
• Chinese stocks rose as the previous week’s steep declines attracted some buyers. Domestic investors however seem to be avoiding market sectors that have recently drawn criticism from the government in favor of areas with strong official support.
• In economic news, China’s official PMI (Purchasers Manager’s Index) readings for July pointed to slower economic momentum in the country’s manufacturing and services sectors. Which analysist have contributed to the resurgence of COVID-19 in China and overseas.

What to watch this week:

• US consumer and small business sentiment data
• US and Chinese inflation data
• Eurozone industrial production
• UK and Eurozone GDP data
• UK, Japanese and Chinese trade data
• Chinese money supply and aggregate social financing data
• 13 S&P 500 and 58 S&P/TSX companies report earnings

• 

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

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