ClearWater Market Commentary as of October 29th, 2021

Here is the ClearWater Market Commentary as of October 29th, 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-0.84%
1 Month4.40%
1 Year35.02%

As of 2021/10/29 – Source:

Index PerformancesLast 5 DaysYTD
Hang Seng Index3.14%7.49%
WTI Crude (oil)1.78%20.25%
S&P 5001.75%23.04%
S&P/TSX Composite0.85%22.61%
Dow Jones Industrial0.21%17.03%
Russell 20000.20%12.03%
CAC 40-0.40%71.90%
Shanghai Composite-0.69%16.30%
FTSE 100-1.68%2.19%
Nikkei 225-4.20%-8.06%

As of 2021/10/29 – Source:

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

US economy (S&P 500 1.75%):

  • Most of the major indexes recorded gains and reached new highs. The week was the busiest of the third-quarter earnings reporting season, with several technologies and internet-related giants announcing results.
  • Consumer discretionary shares fared best within the S&P 500 Index, boosted by a jump in Tesla shares—bringing the firm’s market capitalization above USD 1 trillion—following news that rental firm Hertz Global agreed to buy 100,000 of its electric vehicles.
  • Energy shares underperformed as oil prices fell back from multi-year highs. Supply chain problems appeared to remain at the forefront, with both and Apple (capitalized at roughly USD 1.7 trillion and USD 2.5 trillion, respectively) falling back and dragging the indexes lower on Friday morning after reporting lower growth forecasts because of labour and input shortages.
  • Despite the spotlight on earnings, investors also appeared to react to political and economic factors. The White House said that President Joe Biden made progress on the spending bill following a Sunday meeting with West Virginia Senator Joe Manchin—a key swing vote—who reportedly was open to a USD 1.75 trillion social infrastructure package.
  • President Biden revealed the “framework” of a USD 1.75 trillion deal on Thursday, but whether Manchin and other reluctant Democrats would support it remained unclear by the end of the trading week.
  • Stocks regained their footing on Thursday, despite some mixed economic data. The Commerce Department revealed its advance estimate that the economy expanded at an annualized rate of 2.0% in the third quarter, a sharp slowdown from the previous quarter’s 6.7% pace and below consensus estimates of roughly 2.7%. On the bright side, weekly jobless claims fell modestly more than consensus to a new pandemic-era low of 281,000.
  • Investors may have been reassured that the flipside of slowing growth appeared to be moderating inflation pressures. The Fed’s preferred inflation gauge, the core (excluding food and energy) personal consumption expenditures index, rose 3.6% over the annual period, slightly below consensus and unchanged from the prior month’s pace.

Canadian markets (S&P/TSX -0.84%):

  • The Toronto stock market fell 0.8% during a volatile week in which it experienced the biggest daily loss in nearly a month, followed the next day by the largest gain in five months.
  • Materials and financials pushed Canada’s main stock index lower to the end of the week but the Toronto market rebounded strongly in October from a weak start to fall.
  • Friday started on the wrong foot after two of the largest U.S. tech giants reported disappointing results with Apple highlighting supply chain constraints and Amazon pointing to labour shortages and increasing costs.
  • “Energy, unfortunately, is not able to make up what banks and materials are down, and so you have a bit of a negative day,” 
  • The heavyweight financials sector dropped as bond yields fell while lower metals prices hurt materials.
  • Small said the Canadian stock market has outpaced the majority of U.S. counterparts this year on heightened demand for commodities that has driven up prices, while higher bond yields have supported banks and insurance companies.

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

European and Asian economies:

  • European indexes were mostly up during the week, supported by solid corporate earnings that may have helped to offset concerns about inflation and the potential for central banks to rein in some of their accommodative policies.
  • The European Union’s statistical arm issued a preliminary estimate, indicating that the eurozone economy grew 2.2% sequentially in the third quarter—an uptick from the expansion recorded in the second quarter.
  • The ECB maintained its existing policies and indicated that it would continue buying assets under the auspices of its Pandemic Emergency Purchase Programme (PEPP) at the somewhat moderated rate announced in September.
  • ECB President Lagarde acknowledged that inflation could “take longer to decline than initially expected” but reiterated the view that the rate of consumer price increases should slow by 2023.
  • The UK Office of Budget Responsibility (OBR) revised its outlook for 2021 GDP growth to 6.5% from its previous estimate of 4% and forecast a 6% economic expansion in 2022.
  • The OBR likewise reduced its estimate of the lasting economic damage caused by the coronavirus pandemic to 2% from 3%.
  • With the improved economic outlook and tax increases announced in March and September expected to boost the UK government’s revenue, Finance Minister Rishi Sunak unveiled plans to step up spending on infrastructure as well as education and other public services while cutting or freezing business tax rates for some industries that were hit hard by the pandemic.
  • Ahead of the October 31 general election, Japan’s stock market returns were mixed for the week. The ruling Liberal Democratic Party, under newly chosen leader Fumio Kishida, is widely expected to stay in power as a result of the election but lose seats in the powerful lower house of parliament. The domestic earnings season had some positive effects on market sentiment.
  • As the Bank of Japan (BoJ) maintained its dovish stance it’s expected to remain in easing mode for longer while other major central banks are set to move toward tighter policy.
  • As widely expected, the BoJ kept interest rates and its asset purchase program unchanged at its October monetary policy meeting.
  • The BoJ also cut its projection for economic growth this fiscal year; however, the central bank expects the economy to recover as the impact of COVID-19 gradually wanes, mainly due to widespread vaccinations, supported by increased external demand, accommodative financial conditions, and the government’s economic measures.
  • China’s stock markets retreated amid continued concerns about the strength of the property sector. The property sector, which accounts for about one-third of China’s overall economy has stirred investor anxiety in recent weeks following defaults, credit rating downgrades and, most recently, a proposed tax plan as authorities seek to reduce leverage among leading developers.
  • During the week, a planned pilot real estate tax scheme and a missed payment by Modern Land kept the sector under pressure. On the rating front, both Fitch and S&P Global reduced their credit ratings on several Chinese developers as liquidity concerns and slowing sales continued to weigh on the property sector.
  • Meanwhile, debt-laden China Evergrande paid a delayed coupon within the grace period on Friday, averting what would have been the world’s second-largest emerging market corporate debt default.
  • On the regulatory front, Beijing’s clampdown on the tech sector continued as the country’s internet watchdog proposed restrictions on companies with more than 1 million users with a security review before they can send user-related data abroad.

What to watch this week:

  •  ISM Manufacturing PMI (October)
  •  U.S. Construction Spending (September)
  •  FOMC Meeting
  •  EA Markit Manufacturing PMI, Final (October)
  •  EA Unemployment Rate (September)
  •  U.S. Nonfarm Payrolls (October)

Sources:,, Barron’, and

Thank you for checking out our ClearWater Market Commentary for October 29th, 2021. If you would like to receive the ClearWater Commentary at the start of every week, sign-up for our Newsletter.