ClearWater Market Commentary as of November 23rd, 2020

Here is the ClearWater Market Commentary as of November 23rd, 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	2.41%
1 Month	6.06%
YTD	-0.26%
1 Year	0.13%

As of 2020/11/13 – Source: www.marketwatch.com

Index Performances	Last 5 Days	YTD
WTI Crude (oil)	5.86%	-30.62%
Russell 2000	2.37%	7.00%
CAC 40	2.15%	-8.07%
S&P/TSX Composite	2.06%	-0.26%
Shanghai Composite	2.04%	10.74%
Hang Seng Index	1.13%	-6.17%
Nikkei 225	0.56%	7.91%
FTSE 100	0.55%	-15.79%
DAX	0.46%	-0.84%
Nasdaq	0.22%	32.12%
Gold	-0.99%	23.00%
S&P 500	–0.77%	10.11%
Dow Jones Industrial	-0.73%	2.54%

As of 2020/11/13

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

The rise in COVID-19 cases weighs on U.S. equities, while stock markets in the rest of the world continue to rally on positive vaccine news.

Positive news on COVID-19 vaccines boosted global equities for the second week in a row. Following Pfizer Inc.’s announcement that its candidate vaccine would be more than 90 percent effective, Moderna Inc. added to the optimism that vaccines would eventually end the pandemic by declaring its vaccine to be 94.5 percent effective. Not to be outdone, Pfizer quickly followed up with updated results affirming an efficacy of more than 95% for its vaccine. Encouraging data were also published for Oxford-AstraZeneca vaccine, and the U.S. Food and Drug Administration (FDA) approved the first COVID-19 home test kit.

The wave of encouraging news pushed several stock market indices-including the S&P 500, the Dow Jones Industrial Average, and the MSCI All-Country World Index-to historic highs. However, both the S&P 500 (-0.77%) and Dow Jones (-0.73%) declined to end the week lower, as tightening restrictions in many industries (to limit the rapid spread of the virus) reduced investor confidence. In addition, the disagreement between U.S. Treasury Secretary Steven Mnuchin and the U.S. Federal Reserve on the release of funds to support the economy may also explain the weekly decline in these two U.S. stock market indices.

Other asset classes sent mixed messages to the capital markets. Confidence that vaccines will accelerate the return to normal economic activity has pushed up the price of oil (+5.86%) and lowered asset classes considered as “safe havens”, including gold (-0.99%). However, government bonds fell, sending the opposite signal. In fact, rates on Government of Cnada bonds (10-year maturity) and U.S. Treasury bills have now lost most of the gains they made following Pfizer’s announcement on November 9.

• Canadian markets (S&P/TSX : +2.06%):

The Canadian S&P/TSX Composite Index climbed to its highest level since the end of February and is now down less than 1% since the beginning of the year.
Market Sectors: Technology was one of the top performing sectors, again dominated by Shopify Inc. The e-commerce giant continues to benefit from the pandemic-induced online shopping boom, as well as a recently announced partnership with Alipay, Asia’s largest digital payment platform. As for the energy sector, the rise in oil prices has stimulated the sector despite the fact that several analysts stipulate that global demand will not return to the 2019 level until at least 2022 (world oil)

Economic data: Canadian retail sales jumped by 1.1%, well ahead of expectations (0.2%).

• US economy (S&P 500: -0.77% ):

While the S&P 500 fell from its record low and into negative territory for the week, the Nasdaq Composite Index (+0.22%), recorded a gain, despite the continued decline of many of the large-cap IT and Internet companies that have dominated the market the most during the past year. While there were a few notable exceptions in large-cap stocks (for example, Tesla Inc., which jumped with news of it joining the S&P 500), the majority of the gains in U.S. equities occurred in small and mid-cap stocks (profile of Mackenzie U.S. Mid-Cap Opportunities Fund). Indeed, the Russell 2000 Small cap index (+2.37%) reached its first new high in more than two years.

Equity Sectors: Utilities and Health Care led the declining sectors of the S&P 500, while Energy led the advancing groups.

Economic Data: The economic data primarily indicated a slowdown in activity: unemployment claims increased for the first time in five weeks and retail sales grew at the slowest pace in six months.

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

• European and Asian economies:

All major stock markets in Europe and Asia ended the week in positive territory. Countries that were particularly affected by COVID-19 earlier this year and considered the main beneficiaries of immunization progress (e.g. Italy and Spain) recorded strong gains.

On the Asian side, stock markets had a good week due to the fact that many countries in the region signed the world’s largest free trade agreement (Regional Comprehensive Economic Partnership).

What to watch this week:

Eurozone:

• Gross domestic product (3rd quarter) of Germany and France
• PMI Markit IHS Purchasing Managers’ Indexes for the eurozone manufacturing and non-manufacturing sectors – month of November

United States:

• Conference Board Consumer Confidence Index – November
• Gross domestic product (3rd quarter)
• Durable Goods Orders – Month of October
• Personal Income and Expenses – Month of October
• New home sales – month of October
• Fed’s minutes from the last FOMC meeting
• Quarterly results (Q3 2020) in the U.S.

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

Thank-you for checking out our ClearWater Market Commentary for November 23rd, 2020. If you would like to receive the ClearWater Commentary at the start of every week, sign-up for our Newsletter.