ClearWater Market Commentary as of January 18th, 2021

Here is the ClearWater Market Commentary as of January 18th, 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	-0.14%
1 Month	2.14%
YTD	2.73%
1 Year	1.99%

^{As of 2021/01/15 – Source: www.marketwatch.com}

Index Performances	Last 5 Days	YTD
Hang Seng Index	2.86%	5.42%
Russell 2000	1.53%	7.50%
Shanghai Composite	1.31%	3.01%
Nikkei 225	0.51%	3.05%
S&P/TSX Composite	-0.14%	2.73%
WTI Crude (oil)	-0.20%	7.40%
Nasdaq	-0.29%	0.86%
Dow Jones Industrial	-0.63%	0.68%
S&P 500	-0.83%	0.32%
CAC 40	-0.90%	1.09%
FTSE 100	-0.92%	4.26%
DAX	-1.07%	0.50%

^{As of 2021/01/15}

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

US economy (S&P 500 -0.83%):

• U.S. President-elect Joe Biden announced a $1.9 trillion fiscal-stimulus plan that aims to counter the affects of COVID-19. The plan is the first of two major spending initiatives Biden will seek in the first few months of his presidency.
• Overall however the U.S. stocks still took a breather last week, closing down more than half a percent after posting record highs the week prior. This was due to optimism on the US fiscal stimulus package being lowered around concerns that the impeachment of President Donald Trump might slow the process of the larger-than-expected COVID-19 relief proposals.
• A bigger factor in the week’s pullback may have been the news on the drop in retail sales in December, which was more than expected.
• Also, with vaccine distributions falling well short of expectations and new coronavirus strains being detected, markets are worried that economic lockdowns could be here to stay for awhile longer.
• Signs remain that the U.S. job market is once again under stress, as initial jobless claims saw a spike for the week ending January 9^th

Canadian markets (S&P/TSX -0.14%):

• While stocks still continue to hover near all-time highs, the TSX declined modestly, reversing some of the year-to-date gains.
• Government of Canada 10-year yields started the year well below 1%, the lowest level to start a calendar year in history, but have since risen steadily.
• In the TSX, the small but volatile health care sector posted a double-digit gain as cannabis stocks continued to rally on hopes that the Biden Administration will decriminalize marijuana.
• The energy sector saw a temporary boost as well as oil prices neared US$54 per barrel for the first time in a year, before retreating to the end of the week virtually unchanged.

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

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European and Asian economies:

• Most major European equity markets were lower, despite industrial production stats topping expectations and a reassurance from the European Central Bank President Christine Lagarde that economic activity will rebound as the pandemic recedes.
• The resurgence in coronavirus infections has continued to dent optimism as European governments continued to toughen and extend lockdowns amid the emergence of new, highly infectious variants of the coronavirus and increasing hospitalizations.
• The Bank of Japan had its quarterly meeting and they asserted that Japan’s economy was improving at a moderate pace despite the recent resurgence of the coronavirus.
• Chinese stocks fell as the U.S. added another nine Chinese companies to its investment blacklist on Thursday, taking the total to 44 names that the Trump administration claims has ties to the Chinese military.
• Small clusters of the coronavirus infections have also reappeared in China in recent weeks.

What to watch this week:

Canada

• Bank of Canada interest rate decision (January 20)
• Housing starts (December)
• Manufacturing sales (November)
• Consumer Price Index (December)
• Retail sales (November)

U.S.

• Housing starts (December)
• Building permits (December)
• Markit Purchasing Managers’ Indices (January)
• Existing home sales (December)

• 

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

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