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.

You can view the past four weeks’ Weekly Update in the link to my Blog.

 

Markets

Market scorecard as of close on Friday November 26, 2021.

Equity Indices	Level	1 week	YTD
S&P/TSX Composite	21,126	-2.3%	21.2%
S&P 500	4,595	-2.3%	22.3%
NASDAQ	15,492	-2.2%	20.2%
Euro Stoxx 50	4,090	-4.7%	15.1%
Hang Seng	24,081	-2.7%	-11.6%

Source: Bloomberg, RBC Wealth Management

• TSX closed sharply lower in Friday afternoon trading. All sectors down. Energy the laggard dragged lower by declining crude prices with utilities and communication services the leaders. Global risk-off mode driven by concerns over new Covid variant.

• US equities were down in abbreviated Friday trading, with the market closing at 1pm following the US Thanksgiving holiday. S&P logged its worst day since late February and all major indices finished the week in negative territory. Gold flat, well off best levels. WTI crude down 11.9%, off worst levels but moving back below $70/barrel. Oil notching its worst daily performance since April 2020 on Covid-related global demand concerns. Canadian dollar sharply lower against the USD (1.0 CAD=$0.78 U.S.)

• Two big threads to Friday's risk-off narrative. Lot of attention on new Covid strain out of South Africa, which has been dubbed "Omicron." Reports note B.1.1.529 variant features a high number of mutations, though it is unclear the degree to which the variant is more transmissible or deadly. WHO held a special meeting today on the variant. Multiple nations (reportedly including the US) considering restricting travel to and from South Africa.

• Global equity markets are ending the month of November on a down note as the discovery of a new variant of the coronavirus, recently identified in Africa, has created some alarm. It has been reported that this new variant contains an elevated number of mutations that raise questions around its transmissibility and its response to vaccines. Information remains quite limited at this point and as a result it is premature to draw any conclusions. Nevertheless, it is fair to assume this development has added a new dose of uncertainty for the markets, at least until more evidence emerges and scientists can assess the variant’s attributes over the days and weeks to come.

• There has also been a meaningful increase in Covid infections – of the more established delta variant – in some parts of the world. This is particularly true in Europe, which has re-emerged as the epicenter of the pandemic.

 

Economy

Canada

• Canada’s labour market remains tight, as job vacancies surpass one million. According to the Globe and Mail, vacancies jumped 16.4% from August to September as labour shortages continued to place a high demand for workers. This is the most number of job vacancies opened by employers in the data set published by Statistics Canada going back to 2015.

 

U.S.

• The U.S. economy is continuing on its path of recovery, as signs of improvement in the labour market have left an impression on investors yesterday. Jobless claims fell by 71,000 to 199,000 last week, marking the lowest weekly level in 52 years (Wall Street Journal). This came as both household spending and personal income rose.

• According to meeting minutes released last week from November’s FOMC meeting, a number of Fed policymakers are exhibiting a higher willingness to implement policy measures such as raising interest rates or accelerating the roll back of their quantitative easing program.

Further Afield

• Following Evergrande’s turmoil and subsequent weakening of China’s property sector, the economy has struggled to regain its footing and continued to slow in November. Dragging on the economy are reports of home sales slowing for the third month while car sales were also lagging. While strong export demand has helped subdue the property sector slump, Bloomberg reports the pace of increase in export demand slowed and, other high frequency global trade data also suggest an easing in demand.

• According to Reuters, China remains non-committal in releasing its strategic oil reserves as requested by the U.S. earlier last week. The U.S. plans to release 50MM barrels from strategic reserves in a coordinated effort with other large consuming nations, including China, India and Japan, in an attempt to cool prices.

 

Notes About Companies in Model Portfolio 

• Johnson & Johnson (JNJ) The Janssen Pharmaceutical Companies of Johnson & Johnson announced Wednesday that Health Canada has approved its single-shot COVID-19 vaccine to prevent COVID-19 in individuals 18 years of age and older. This decision was based on scientific evidence, including initial data from the Phase 3 ENSEMBLE study that demonstrated the vaccine was 85 percent effective in preventing severe disease, and showed protection against COVID-19 related hospitalization and death, beginning 28 days after vaccination.

 

Feel free to contact me with any questions and/or to discuss investment ideas.

I appreciate the opportunity to serve you and look forward to continuing to help you accomplish your long-term financial goals.

 

Regards,

Shiuman