ClearWater Market Commentary as of July 26, 2021

Here is the ClearWater Market Commentary as of July 26, 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	2.12%
1 Month	0.09%
YTD	17.13%
1 Year	24.76%

^{As of 2021/07/23- Source: www.marketwatch.com}

Index Performances	Last 5 Days	YTD
CAC 40	4.35%	18.36%
Russell 2000	3.98%	12.07%
Nasdaq	3.95%	15.12%
S&P 500	3.59%	17.45%
DAX	3.45%	13.88%
Dow Jones Industrial	3.16%	14.48%
FTSE 100	2.61%	8.69%
S&P/TSX Composite	2.12%	17.13%
Oil ($/bbl)	0.30%	48.50%
Shanghai Composite	0.25%	1.10%
Nikkei 225	-0.39%	0.38%
Hang Seng Index	-0.72%	0.12%

^{As of 2021/07/23- Source: www.marketwatch.com}

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

US economy (S&P 500 3.59%):

• Stocks ended the week higher, rebounding from a sell-off on Monday. The advance was narrow, however, with much of the gains concentrated in technology and internet-related giants (ie. FANG stocks).
• Growth stocks handily outperformed value stocks for the fifth consecutive week, leaving them ahead for the year to date.
• The steep declines at the start of the week were attributed most likely to the growing fears about the spread of the delta variant of the coronavirus as cases and hospitalizations rose in many parts of the country.
• Stocks tied to the reopening of the economy fared particularly poorly. Energystocks were especially weak as oil prices suffered their biggest daily declinesince April 2020, after OPEC and other major oil exporters struck a deal to increase output.
• However, the major benchmarks recoupled almost all their losses. Positive news on the housing sector may have been partly responsible. Prominent second-quarter earnings also appeared to play a role in the rebound.

Canadian markets (S&P/TSX 2.12%):

• Canada’s main stock index saw pressure last week due to the drop in energy and materials.
• Healthcare stocks also pulled the index down, with cannabis companies like Aurora Cannabis Inc. and Tilray Inc. facing losses of more than 4 per cent in the stock values.
• Canadian retail sales (May) fell, following last month’s 5.6% plunge as lockdowns persisted in parts of the country. The decline was broad-based, with hefty setbacks in building materials (-11.3%) and clothing (-11.2%). Statcan’s preliminary estimate for June calls for a sharp rebound however.

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

European and Asian economies:

• Shares in Europe rose on optimism about the upcoming corporate earnings season and the European Central Bank’s (ECB) reaffirmation of its dovish monetary policies.
• These tailwinds helped to reverse early weakness in the markets that stemmed from fears that the spread of the delta variant of the coronavirus could delay a global economic recovery.
• Europe does continue to reopen none the less even as infections surge.
• The European Central Bank signalled it may keep rates lower for even longer, until it sees inflation reaching 2%.
• Japan’s stock markets closed in negative territory ahead of a long weekend that marked the start of the Tokyo Olympics.
• Japan’s government updated its basic energy plan, with the draft expected to be approved later this year. It outlines ambitious plans to drastically increase the country’s renewable energy use and reduce fossil fuel consumption over the next decade.
• China stocks recorded a mixed week. The People’s Bank of China kept loan rates unchanged and analysts see the central bank maintaining stable credit flows to state-owned enterprises, companies, and consumers while monitoring pressures on leveraged borrowers, such as property developers.
• No major economic readings were released over the week. But in corporate news, Beijing reportedly plans to exempt Chinese companies listing in Hong Kong from having to first seek approval from China’s cybersecurity regulator, Bloomberg reported. The move would effectively encourage companies to have their initial public offerings in Hong Kong over the U.S., where many of the country’s largest tech companies are listed.

What to watch this week:

• Canadian and Eurozone inflation data
• Canadian, US, and Eurozone GDP data
• US monetary policy announcement
• US housing, durable goods, personal income and spending data
• Eurozone and Japanese employment data
• Japanese retail sales and industrial production data
• Eurozone consumer confidence data
• 176 S&P 500 and 50 S&P/TSX companies report earnings

• 

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

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