ClearWater Market Commentary as of December 14th, 2020

Here is the ClearWater Market Commentary as of December 14th, 2020:

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	0.16%
1 Month	2.09%
YTD	2.85%
1 Year	3.60%

^{As of 2020/12/04 – Source: www.marketwatch.com}

Index Performances	Last 5 Days	YTD
Russell 2000	1.16%	14.85%
WTI Crude (oil)	0.70%	-23.70%
S&P/TSX Composite	0.16%	2.85%
Nikkei 225	-0.38%	15.42%
Dow Jones Industrial	–0.77%	3.59%
Nasdaq	–1.05%	38.53%
S&P 500	–1.17%	11.57%
CAC 40	-1.31%	-2.19%
Hang Seng Index	-1.44%	-7.04%
DAX	–1.81%	4.60%
Shanghai Composite	–2.05%	9.80%
FTSE 100	–2.08%	–14.84%

^{As of 2020/12/04}

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

• US economy (S&P 0.16%):

• US Small-caps continue to outperform. The major indexes hit new highs on Wednesday and the Russell 2000 index outpaced the S&P 500 for the 5^th consecutive week
• The S&P 500 however continues to show signs that its momentum is extending
• Pfizer/BioNTech vaccine nears distribution. This positive vaccine news appeared to boost investor sentiment as they confirmed the vaccine was 95% effective. The brightening outlook for an eventual end to the pandemic came against a grim set of current milestones, however. Daily U.S. deaths from the virus crossed 3000 for the first time and new state restrictions continued to be announced for the holidays 
• The Bipartisan relief bill remains in doubt. Whether congress will respond with further fiscal stimulus remains unknown.
• The impact of latest wave of infections was perhaps most evident in the weekly jobless claims which jumped from 716,000 to 853,000.

Canadian markets (S&P/TSX 0.72%):

• Although Canadian equities closed mixed last week, the TSX rose to a nine-month high following the fresh record highs set last week by the major U.S. indexes.
• The Bank of Canada left its policy rate unchanged near zero and highlighted that the outlook remains fluid with both downside and upside risks.
• Even as the economic momentum slows in the near term, the outlook for the economy remains positive over the next year, though the road may be bumpy.  
• The rollout of vaccines (Canada approved the Pfizer vaccine last week) will likely accelerate growth and clear the way for a durable rebound in economic activity.
• Later next year we should hopefully see the economy closer to its normal state due to easy of restrictions and a economic re-opening will unless pent-up consumer demand.

Performance 2020: S&P 500/400/600 Sectors

• European and Asian economies:

• European shares fell on concerns about the rising number of coronavirus cases in key economies. France extended lockdown measures and Germany is set to follow.
• There remains uncertainty surrounding a post-Brexit trade deal. Talks between the British Prime Minister Boris Johnson and Ursula von der Leyen, the European Commission president, failed last week to break the deadlock over a UK-EU trade deal. A Final deadline announcement to be set for this week.
• On brighter news, the EU approved a historic budget and the ECB extended stimulus measures. The 1.8 trillion budget will start distribution money to needy member states in the second half of next year.
• Japan stocks posted mixed results as the Japanese government unveiled a third round of stimulus.
• China equities fell on renewed tensions with the U.S. after a second major index provided removed some Chinese companies from its benchmarks following a Trump administration executive order. Worries over U.S. sanctions continue to weigh on sentiment.

What to watch this week:

Canada:

• Statistics Canada will release its Monthly Survey of Manufacturing on Tuesday
• Statistics Canada will release its Consumer Price Index for November on Wednesday.
• BlackBerry will release Q3 results after market close on Thursday

United States:

• This upcoming Friday is the deadline to avoid a government shutdown…again.
• Nike reports earnings this upcoming Thursday.
• This upcoming Wednesday, the Federal Open Markets Committee announces interest rates and monetary policy.

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

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