To my clients:
It was a generally up week for North American stock markets with the Canadian TSX finishing up 0.3%; the U.S. Dow Jones Index finishing down 0.01% (note the extra zero… essentially flat); and the U.S. S&P 500 finishing up 0.4%.
It is the barest of updates this week owing to time pressures as well as unchanged messaging:
- Chinese trade talks continue. I’d characterize the overall tenor as cautiously optimistic.
- In testimony before U.S. Congress, Fed Chair Jerome Powell continued to portray a Fed more likely than not “on hold” (i.e. unlikely to raise interest rates further) unless incoming economic data strengthens materially and warrants it.
- The second U.S./North Korea summit was terminated early by Donald Trump owing to North Korea’s lack of commitment to reduce their nuclear arsenal aggressively enough.
- On economic data, U.S. 4th Quarter GDP slowed, but still rose a solid 2.6%. Q1 2019 is expected to slow more before moving higher for the remainder of 2019. The 4th Quarter GDP report is consistent with what I and RBC have been conveying consistently for the past several months – growth was expected to slow, but NOT reverse into contraction.
- Canadian GDP came in weaker than expected, and may give the Bank of Canada pause to further raise rates this side of the border. As a result the US dollar strengthened materially against the Canadian dollar in trade today.
That’s it for this week. All the best,
Nick Scholte, CIM, FCSI
Vice-President & Portfolio Manager
RBC Dominion Securities Inc. │ Tel: 604.257.7569 │ Fax: 604.235.9950
3200-1055 West Georgia │ Vancouver, BC │ V6E 3P3
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