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Category Archives: The Markets

Frank Mueller

Weekly Update – April 6, 2018

“Isn’t it appropriate that the month of the tax begins with April Fool’s Day and ends with cries of May Day!” – Robert Knauerhase

Throughout the month of April until the end of tax season, our weekly update will consist solely of the market numbers. Remember that if you have any questions or concerns about your portfolio or the state of markets in general, we are simply a phone call or email away.

Weekly Market Wrap-Up

North America

  • The TSX closed at 15207, down -160 points or -1.04% over the past week. YTD the TSX is down -6.18%.
  • The DOW closed at 23933, down -170 points or -0.71% over the past week. YTD the DOW is down -3.18%.
  • The S&P closed at 2605, down -36 points or -1.36% over the past week. YTD the S&P is down -2.58%.
  • The Nasdaq closed at 6915, down -149 points or -2.11% over the past week. YTD the Nasdaq is up 0.17%.
  • Gold closed at 1337, up -23.00 points or 0.91% over the past week. YTD gold is up 2.06%.
  • Oil closed at 61.95, down -2.99 points or -4.60% over the past week. YTD oil is up 2.53%.
  • The USD/CAD closed at 0.7826, up 0.0071 points or 0.92% over the past week. YTD the USD/CAD is down -1.60%.

Europe/Asia

  • The MSCI closed at 2081, up 14 points or 0.68% over the past week. YTD the MSCI is down -1.05%.
  • The Euro Stoxx 50 closed at 3408, up 46 points or 1.37% over the past week. YTD the Euro Stoxx 50 is down -2.74%.
  • The FTSE closed at 7184, up 127 points or 1.80% over the past week. YTD the FTSE is down -6.56%.
  • The CAC closed at 5258, up 91 points or 1.76% over the past week. YTD the CAC is down -1.04%.
  • DAX closed at 12241, up 144.00 points or 1.19% over the past week. YTD DAX is down -5.24%.
  • Nikkei closed at 21568, up 114.00 points or 0.53% over the past week. YTD Nikkei is down -5.26%.
  • The Shanghai closed at 3131, down -38.0000 points or -1.20% over the past week. YTD the Shanghai is down -5.32%.

Fixed Income

  • The 10-Yr Bond Yield closed at 2.78, up 0.0400 points or 1.46% over the past week. YTD the 10-Yr Bond is up 15.83%.

Sources: Dynamic Funds

Frank Mueller

Weekly Update – March 29, 2018

“Markets love volatility” – Christine Lagarde

Last week, we advised that the weekly brief will only consist of market numbers until the completion of tax season on April 30th. However, we wanted to provide some perspective on the recent market pullback.

Bloomberg has written a great article on the recent volatility. Throughout the current nine-year U.S. bull market, there have been five other corrections like this one. On average, equities fell 14 per cent and took seven months to recover. It has been 60 days since the January 26th peak for the S&P 500; therefore, this current correction could last until August (if other recent selloffs are any indication).

While the message we’re trying to impart is that volatility is quite normal, we understand that it may be concerning in the short term. The above data is simply a reminder that even in an upward market there are prolonged periods of negative returns.

If you have any questions about markets or your portfolio, please feel free to contact us.

On behalf of the You First team, we wish you a Happy Easter long weekend.

Frank Mueller

Weekly Update – March 23, 2018

“Globalization and free trade do spur economic growth, and they lead to lower prices on many goods” – Robert Reich

Please note that starting next week until the end of April, our weekly update will simply consist of the weekly and year-to-date market numbers.

Stock Markets Drop on Tariff Worries

Sabre-rattling between the United States and China intensified this week, with President Trump signing a presidential memorandum with aim to impose $60 Billion of import tariffs on Chinese goods; the Chinese retaliated with a $3 Billion tariff threat on American goods.

It should be noted that prior to officially enacting the tariffs on China, there is a 30-day consultation period on the memorandum, so there is certainly no guarantee that the tariffs will come to pass.

What does this mean for your portfolio? Well, following a relatively smooth and calm 2017, 2018 has brought us the “return of market volatility”, with more ups and downs in the market. This increased volatility provides long-term-focused investors with buying opportunities when markets do dip, such as right now.

Feel free to contact us with questions, or if you’d like to make a contribution!

Parents with Children at Daycare: Check for Fee Reductions Starting April

In its February budget, the provincial government announced various affordable childcare initiatives.

The measure that made most headlines is the affordable childcare benefit, an income-based subsidy making childcare free for families with income below $45,000. This will take effect starting September 2018.

What was not as heavily mentioned was a non-income-based fee reduction under the new Child Care Operating Funding (CCOF) program. The program is optional – childcare providers can choose to or not to participate.

For childcare providers that have opted into the CCOF program, the fee reductions will start as early as April 1st, and are as follows:

  • $350/month for group infant/toddler care
  • $200/month for family infant/toddler care
  • $100/month for group care for children aged 3-5
  • $60/month for family care for children aged 3-5

If you have an infant or toddler or a child aged 3 to 5 in licensed group or family care, check to see if your provider is planning to participate in the fee reduction initiative.

More information can be found here.

Weekly Market Wrap-Up

North America

  • The TSX closed at 15224, down -487 points or -3.10% over the past week. YTD the TSX is down -6.08%.
  • The DOW closed at 23533, down -1414 points or -5.67% over the past week. YTD the DOW is down -4.80%.
  • The S&P closed at 2588, down -164 points or -5.96% over the past week. YTD the S&P is down -3.22%.
  • The NASDAQ closed at 6993, down -489 points or -6.54% over the past week. YTD the Nasdaq is up 1.30%.
  • Gold closed at 1348, up -9.00 points or 2.51% over the past week. YTD gold is up 2.90%.
  • Oil closed at 65.81, up 3.47 points or 5.57% over the past week. YTD oil is up 8.92%.
  • The USD/CAD closed at 0.7755, up 0.0118 points or 1.55% over the past week. YTD the USD/CAD is down -2.49%.

Europe/Asia

  • The MSCI closed at 2073, down -61 points or -2.86% over the past week. YTD the MSCI is down -1.43%.
  • The Euro Stoxx 50 closed at 3304, down -133 points or -3.87% over the past week. YTD the Euro Stoxx 50 is down -5.71%.
  • The FTSE closed at 6922, down -242 points or -3.38% over the past week. YTD the FTSE is down -9.96%.
  • The CAC closed at 5095, down -188 points or -3.56% over the past week. YTD the CAC is down -4.10%.
  • DAX closed at 11886, down -504.00 points or -4.07% over the past week. YTD DAX is down -7.99%.
  • Nikkei closed at 20618, down -1059.00 points or -4.89% over the past week. YTD Nikkei is down -9.43%.
  • The Shanghai closed at 3153, down -117.0000 points or -3.58% over the past week. YTD the Shanghai is down -4.66%.

Fixed Income

  • The 10-Yr Bond Yield closed at 2.83, down -0.0200 points or -0.70% over the past week. YTD the 10-Yr Bond is up 17.92%.

Sources: Globe Advisor, Dynamic Funds

Frank Mueller

Weekly Update – January 19, 2018

“Wealth consists not in having great possessions, but in having few wants” – Epictetus

TSX Marginally Up for The Week

The Toronto Stock Exchange’s S&P/TSX composite index rose on Friday by 68.99 points (0.42 per cent) to finish up at 16,353.46, a gain of 45.28 points (0.28 per cent) for the week. Though modest, the weekly gain put the index back in the right direction after last week’s loss.

Nine of the 10 main sectors posted wins on Friday. Financials and industrials led the way. The Energy sector was weighed down by an oil pullback. A barrel of Crude Oil fell by 38 cents (USD) on Friday to settle at $63.57 USD per barrel, a down-tick of 86 cents for the week (1.33 per cent).

The oil decrease also affected the Loonie, which weakened compared to the Greenback on Friday. As of 3:59pm EST, the Loonie had dropped 0.64 per cent versus the American Dollar, and sat at 80.01 cents USD.

Investors have now set their sights forward to next week’s NAFTA talks. Some analysts feel NAFTA is a risk, and could pull the Loonie down, should NAFTA be abandoned. Said Mark McCormick, North American head of Foreign Exchange Strategy at TD Securities: “The market is really going to have to price in a negative risk premium on the Canadian dollar, driven primarily on the breakup risks of NAFTA”.

Gold retreated from $1,339 USD per ounce to begin the week back to finish at $1,331.10 USD per ounce, shaving off $7.90 USD per ounce (0.59 per cent).

U.S. Markets Advance, Again

Another week, another plateau hit for the Dow Jones Industrial Average (DJIA). This week, it rose above 26,000 for the first time. On Friday, it gained 53.91 points (0.21 per cent) to close at 26,071.72. On the week, the DJIA was up 268.53 points (1.04 per cent).

The S&P 500 hit its own record closing high, gaining 12.27 points (0.44 per cent) on Friday to close out 2,810.30 (up 0.86 per cent for the week).

The NASDAQ also set a record closing high, climbing to 7,336.38 on the back of a 40.33 point, 0.55 per cent, Friday gain. NASDAQ gained 1.04 per cent for the week.

Disagreements between U.S. Senate Democrats and Republicans could lead to a government shutdown. The deadline is midnight Friday night (tonight). Senate Minority Leader Chuck Schumer and U.S. President Donald Trump met to negotiate an end to the impasse on Friday. The potential shutdown had a minor effect on U.S. markets, but these days, it seems nothing can impede their advance.

As Expected, Bank of Canada Raises Key Rate

As widely expected, the Bank of Canada raised its benchmark interest rate on Wednesday morning. As with the previous two rate hikes, this was an increase of 25 basis-points from 1.00 per cent to 1.25 per cent. This makes three rate hikes in a little over six months after the BoC held rates steady at 0.50 per cent for nearly nine years. Strong employment figures were among the main reasons that the BoC felt comfortable enough to enact the rate hike.

Two further rate increases are expected by the end of 2018.

As mentioned last week, the rate rise will affect new home purchasers (who didn’t have rate holds in place) and those who carry credit balances on their Home Equity Lines of Credit, regular lines of credit, or home owners with variable mortgage rates.

 

Sources: Globe Advisor, Yahoo! Finance

Frank Mueller

Weekly Update – January 12, 2018

“Success is not final; failure is not fatal: It is the courage to continue that counts.” – Winston S. Churchill

TSX Winning Streak Snapped

The Toronto Stock Exchange’s S&P/TSX composite index rose on Friday but still posted a weekly loss. Friday saw a 21.24-point rise, good for a 0.13 per cent gain. However, the TSX was down 41.26 points on the week, closing at 16,308.18 (down 0.25 per cent week-over-week). This was the first weekly decline in a month, after three consecutive weekly gains.

Cannabis producers were down sharply, but their losses were offset by resource, gold and lumber gains.

U.S. Crude Oil rose by $2.99 USD per barrel or 4.87 per cent this week, closing at $64.43 per barrel.

Gold rose to $1,339 USD per ounce this week, as the US Dollar depreciated.

The December jobs report once again showed strong growth in Canada, with 23,700 full-time jobs and 78,600 total jobs added. Canada’s unemployment rate fell to its lowest mark in 41 years, from 5.9 per cent in November down to 5.7 per cent for December.

However, David Rosenberg, Chief Economist and Strategist at Gluskin Sheff + Associates opined “at face value the (unemployment) number looks great, but… there are question marks beneath the surface that has me thinking it is overstating the strength in the economy”.

Undaunted, the Loonie took the jobs numbers and moved upward to settle at 80.24 cents to the Greenback. Should the Bank of Canada raise their key rate next week (more on that below) we can expect the Loonie to jump again.

U.S. Markets Continue to Rise

The Dow Jones Industrial Average (DJIA) continued to skyrocket this week. Last week, the DJIA rose above 25,000 for the first time; this week, after a rise of 228.46 points (0.89 per cent) on Friday, the major index rose to 25,803.19, good for a weekly gain of 507 points, an even two per cent gain.

The S&P 500 rose 18.68 points (0.67 per cent) on Friday to close out the week at 2,786, good for a weekly gain of 1.57 per cent.

NASDAQ gained 49.29 points (0.68 per cent) on Friday to close at 7,261, a weekly gain of 124 points (1.74 per cent).

Bank of Canada Expected to Raise Rates Next Week

This coming Monday, January 15th is the dreaded “Blue Monday 2018”, where the perfect storm of poor weather, short days and long nights, the realization of how much was *actually* spent over the holidays, the fact the holidays are now firmly in the rear-view mirror, low motivation levels, and finally, the realization that most or all of our New Year’s Resolutions have failed to take hold all combine to create the saddest day on the calendar year.

For those who haven’t managed to keep spending in check over the holidays (or otherwise), this Wednesday may add to the misery. The Bank of Canada is overwhelmingly expected by analysts to raise its benchmark rate to 1.25%, up from 1.00%, this coming week. Many big banks such as RBC, TD and CIBC have already raised their mortgage rates in anticipation.

As rates climb, you can expect credit balances with variable rates, such as variable rate mortgages, home equity lines of credit (HELOCs), and secured & unsecured credit lines to increase their rates accordingly. As a result, borrowers will now pay more interest each month on these balances. Credit card rates (which are generally sky-high at 19.99 – 28.99 per cent) won’t be affected, but the rates are so high that you shouldn’t carry balances anyway.

Bottom line: pay down those credit lines where possible to avoid paying more interest each month.

WEEKLY MARKET WRAP-UP

North America
The TSX closed at 16308, down -41 points or -0.25% over the past week. YTD the TSX is up 0.61%.
The DOW closed at 25803, up 507 points or 2.00% over the past week. YTD the DOW is up 4.39%.
The S&P closed at 2786, up 43 points or 1.57% over the past week. YTD the S&P is up 4.19%.
The Nasdaq closed at 7261, up 124 points or 1.74% over the past week. YTD the Nasdaq is up 5.19%.
Gold closed at 1339, up 14.00 points or 1.13% over the past week. YTD gold is up 2.21%.
Oil closed at 64.43, up 2.99 points or 4.87% over the past week. YTD oil is up 6.64%.
The USD/CAD closed at 0.80239, down -0.0044 points or -0.55% over the past week. YTD the USD/CAD is up 0.89%.

Europe/Asia
The MSCI closed at 2172, up 15 points or 0.70% over the past week. YTD the MSCI is up 3.28%.
The Euro Stoxx 50 closed at 3613, up 5 points or 0.14% over the past week. YTD the Euro Stoxx 50 is up 3.11%.
The FTSE closed at 7779, up 55 points or 0.71% over the past week. YTD the FTSE is up 1.18%.
The CAC closed at 5517, up 46 points or 0.84% over the past week. YTD the CAC is up 3.84%.
DAX closed at 13245, down -75.00 points or -0.56% over the past week. YTD DAX is up 2.53%.
Nikkei closed at 23654, down -61.00 points or -0.26% over the past week. YTD Nikkei is up 3.91%.
The Shanghai closed at 3429, up 37.0000 points or 1.09% over the past week. YTD the Shanghai is up 3.69%.

Fixed Income
The 10-Yr Bond closed at 2.55, up 0.0700 points or 2.82% over the past week. YTD the 10-Yr Bond is up 6.25%.

Sources: Globe Advisor, BNN.ca, Yahoo! Finance

Frank Mueller

Weekly Update – January 5, 2018

“Every accomplishment starts with a decision to try” – Anonymous

New Year, Same Rally

The Toronto Stock Exchange’s S&P/TSX composite index dropped 63.50 points (0.39 per cent) on Friday to finish at 16,349.44. Resources weighed on the TSX on Friday, with oil, gold, copper and other metals pulling back on the day.

However, the TSX enjoyed a gain of 0.9 per cent on the week as the extended market rally continued into 2018.

Statistics Canada announced the December jobs numbers, with 79,000 new jobs being added. One caveat, however, is that most of them were seasonal, part-time positions. However, Canada’s unemployment rate of 5.9% in November was a full percentage point lower than in November 2016.

Retail sales data, housing starts, and consumer confidence levels were all higher year-over-year as well.

U.S. Crude Oil dropped by 42 cents USD per barrel to finish the week at $61.59 USD.

Gold dropped by $1.30 USD per ounce on Friday, and finished at $1,320.30 per ounce.

The Loonie rose by 56 basis points on Friday to finish at 80.61 cents to the Greenback, a rise of 0.6989 per cent.

U.S. Markets Hit More Record Highs

The S&P 500 rose 19.08 points (0.70 per cent) on Friday to close out the week at 2,743.07.

The Dow Jones Industrial Average (DJIA) rose above 25,000 for the first time ever on Thursday, and jumped by 220.74 points (0.88 per cent) on Friday to finish at 25,295.87.

NASDAQ also had a good day on Friday, with a gain of 58.64 points (0.83 per cent).

Some encouraging global economic data helped to propel markets upward. US unemployment figures for November – like Canadian unemployment – were lower than a year prior.

2017 Market Recap

It was, in some ways, a strange year for the Canadian investor. Early in the year, Canadian markets were relatively flat, while south of the border, U.S. markets were (and still are) very hot. Overseas markets advanced. However, as the Canadian dollar appreciated relative to the Greenback, U.S. and many overseas gains were mitigated.

As the year progressed, the Bank of Canada raised rates twice, and the Fed also raised rates. The BoC raising rates led to a dampening of fixed income returns. Luckily, the TSX rebounded late and was able to post a decent, if unremarkable, 6% increase on the year.

Most major international indexes posted double-digit returns; in fact, even factoring the appreciating Loonie, global markets outpaced Canadian markets.

So, what is the lesson here? In our opinion, this information reinforces the benefit of sound diversification, not only between equities and fixed income, but also regional diversification. Canadian investors have the reputation of being the most biased toward domestic markets, and, at least in 2017, the Canadian investor who invested heavily in Canada at the expense of other regions certainly missed out on some significant gains.

If you have questions about your asset allocation or would like to come in for a review of your portfolio, please let us know!

2017 Market Recap: By The Numbers

North America
The TSX finished at 16,209, up 6.0% for 2017
The DOW finished at 24,719, up 25.1% for 2017, or 17.0% in $CDN
The S&P 500 finished at 2,674, up 19.4% for 2017, or 11.7% in $CDN

The NASDAQ finished at 6,903, up 28.2% for 2017, or 19.9% in $CDN
Gold finished at $1,303 USD per ounce, up 13.1% for 2017
Oil finished at $60.42 USD per barrel, up 12.5% for 2017
The USD/CDN finished at 0.7955, up 6.9% for 2017
The CDN/EUR finished at 1.5089, up 6.8% for 2017

Europe/Asia
The MSCI World finished at 2,103, up 20.1% for 2017, or 12.3% in $CDN
The MSCI EAFE finished at 2,051, up 21.8% for 2017, or 13.9% in $CDN
The MSCI EM finished at 1,158, up 34.3% for 2017, or 25.7% in $CDN
The FTSE 100 finished at 7,688, up 7.6% for 2017, or 10.3% in $CDN
The DAX finished at 12,918, up 12.8% for 2017, or 20.4% in $CDN
The Nikkei finished at 22,765, up 18.9% for 2017, or 15.3% in $CDN

Sources: Globe Advisor, TD, Yahoo! Finance