Below is a summary of some of the relevant news items from the Capital Markets and the Economy from the past week extracted from RBC Global Insights and FactSet Research.

Markets

Market scorecard as of close on Friday July 9, 2021.

Equity Indices	Level	1 week	YTD	52-week
S&P/TSX Composite	20,258	0.2%	16.2%	30.1%
S&P 500	4,370	0.4%	16.3%	38.6%
NASDAQ	14,702	0.4%	14.1%	39.4%
Euro Stoxx 50	4,068	-0.4%	14.5%	24.7%
Hang Seng	27,345	-3.4%	0.4%	4.3%

Source: Bloomberg, RBC Wealth Management

• TSX closed higher in Friday afternoon trading. Materials the leader with utilities the laggard. Canadian equities eked out a small 0.2% gain on a weekly basis. US equities finished higher Friday, near best levels of session. Stocks put in modest weekly gains, with S&P logging its sixth gain in the past seven weeks (despite a notable pullback in Thursday trading).

• According to the Financial Times, the S&P 500 is expected to have its greatest year-over-year profit increase since the financial crisis as the economy recovers from the troughs of the coronavirus pandemic. Earnings-per-share for S&P 500 companies is forecasted to grow almost 63% year-over-year for the three months ending June 30, after growing 52.5% in Q1.

• Markets have grown uneasy in recent days following investor concerns that new COVID-19 variants could stall the global economic recovery despite the vaccine rollout progress. Supply-chain bottlenecks and concerns over labor-market participation are also weighing on investor sentiment.

• Asian equities higher overnight with Japan a standout, up over 2%, while China's Shenzen Composite gained nearly 2%. European equities narrowly mixed.

 

 

Economy

Canada

• The Bank of Canada (BoC) rate statement and Monetary Policy Report (MPR) are the highlights of the macro calendar this week on 14-July. The BoC is expected to taper its QE program and upgrade its forecasts as vaccination rates have ramped up and boosted economic recovery. Press noted solid GDP growth, low COVID-19 cases and reopening to give the BoC confidence to cut its pace of QE purchases to $2B a week.

U.S.

• Big macro week ahead with US inflation and retail sales data for June, [Federal Reserve Chair] Powell's monetary policy testimony in front of Congress, Treasury sales, and China June trade, activity and Q2 data.

• Multiple reports again discussed how both a bipartisan infrastructure bill and a separate package of Democratic priorities face very complicated paths.

Further Afield

• In coronavirus developments, FT reported the rapid spread of the Delta variant could potentially undermine the economic rebound if rising infection levels lead to a reintroduction of travel and social restrictions. Meanwhile in the UK, PM Johnson will host a press conference and is expected to confirm final lifting of Covid measures on 19-Jul. Covid situation continues to escalate across Asia with Sydney braced for a longer lockdown after another surge in cases.

 

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