ClearWater Market Commentary as of June 14th, 2021

Here is the ClearWater Market Commentary as of June 14th, 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 Day0.51%
1 Month3.98%
YTD14.89%
1 Year32.00%

As of 2021/06/11- Source: www.marketwatch.com

Index PerformancesLast 5 DaysYTD
Oil ($/bbl)1.70%45.90%
Nasdaq1.35%9.16%
CAC 400.93%18.97%
FTSE 1000.89%10.53%
S&P/TSX Composite0.51%15.52%
Russell 20000.49%18.01%
S&P 5000.49%13.08%
Nikkei 2250.49%6.26%
Hang Seng Index0.19%5.92%
DAX0.13%14.42%
Shanghai Composite-0.27%3.36%
Dow Jones Industrial-0.43%12.65%

As of 2021/06/11- Source: www.marketwatch.com


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

US economy (S&P 500 0.49%):

  • A sharp decrease in longer-term bond yields appeared to have helped push the S&P500 Index to a record high in relatively light summer week.
  • Growth stocks are favored when bond yields decline, as this implies future earnings will be less discounted, however it will weigh on financials by threatening bank lending margins.
  • The technology heavy Nasdaq Composite Index outperformed and markets its four consecutive weekly gain.
  • Interest rates and inflation fears seemed to continue to dominate sentiment. The Federal Reserve policy makers continued to provide assurances that they would keep monetary policy highly accommodative for ‘some time’ and that the recent spike in inflation would prove to be temporary.
  • This seems to have contained longer-term inflation expectations.
  • On Thursday, a bipartisan group in the Senate reached a deal on an infrastructure plan that would not raise corporate taxes, as the Biden administration had proposed. The plan would also include approx. USD 762 billion in new spending, significantly less than the proposed USD 2 trillion the White House had originally requested.
  • Republican leaders indicated they were open to the proposal, but it remains unclear if the president and Democratic leaders in Congress would agree to the scaled-back plan.

Canadian markets (S&P/TSX 0.51%):

  • Canada’s main stock index moved further into record territory on a broad-based rally led by energy as crude prices climbed on increased demand from economic re-openings.
  • Energy names continued to rise as crude oil prices rose after surpassing US$71 last week.
  • The Bank of Canada kept its overnight rate steady at 0.25% and made no change to its $3 billion/week quantitative easy (QE) program.
  • Canada’s merchandise trade balanced (April) moved from a deficit to surplus, which is a great sign given that most of the last six years it has been in a deficit.
  • Canada’s National Balanced Sheet also showed household finances are continuing to improve, as household debt-to-disposable income edged lower.

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

European and Asian economies:

  • Shares in Europe gained for a fourth consecutive week, lifted in part by the
    European Central Bank’s (ECB) pledge to continue its high rate of bond
    purchases into the coming quarter.
  • Eurozone government bonds yields largely fell, reflecting the ECB’s commitment
    to continue its bond-buying program at the current pace for another quarter.
  • Fears rose that England’s reopening of society would be delayed for some weeks
    beyond the June 21 st target date because of the new, faster-spreading “Delta”
    variant of the novel coronavirus.
  • German industrial production and factory orders unexpectedly declined in April, a
    sign that the economic rebound could be stuttering.
  • Japan’s stock market returns were broadly unchanged for the week.
  • While Japan’s domestic economic recovery remains fragile, sentiment was
    boosted by the government lifting the coronavirus quasi-states of emergency in
    three prefectures in the face of a steadily declining infection rate.
  • Chinese stocks fell for a second week. News in the Guanghzhou of a renewed
    COVID-19 controls due to a fresh outbreak in the southern coastal city weighed
    on sentiment.
  • More positively, state media reported that the U.S. and China agreed to renew
    talks on improving trade and investment ties, while the U.S. President Biden said
    he would review a Trump administrate decision to ban Chinese mobile apps
    TikTok and WeChat.
  • China’s President Xi Jinping also made headlines as he announced further plans
    to develop Qinghai province as a clean energy hub and green agricultural
    produce supplier.

What to watch this week:

  • Eurozone Industrial Production (April).
  • Canadian Manufacturing Sales (April).
  • U.K. Unemployment Rate (May).
  • Eurozone Trade Balance (April).
  • Canadian Housing Starts (May).
  • U.S. Retail Sales (May).
  • U.S. Industrial Production (May).
  • Chinese Unemployment Rate (May)
  • Chinese Industrial Production (May).
  • U.S. Building Permits (May).
  • U.S. Housing Starts (May).
  • Canadian CPI (May).
  • U.S. Federal Open Markets Committee (FOMC) Statement, Interest Rates
  • Decision and Meeting Minutes.
  • Eurozone CPI (May).
  • Bank of Japan Monetary Policy and Interest Rate Decision.

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

Thank-you for checking out our ClearWater Market Commentary for June 14th, 2021. If you would like to receive the ClearWater Commentary at the start of every week, sign-up for our Newsletter.