Shiuman Ho's Weekly Update -- Monday September 12, 2022

Shiuman Ho's Weekly Update -- Monday September 12, 2022

九月 12, 2022 | Shiuman Ho

Share

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 September 9, 2022.

Equity Indices

Level

1 week

YTD

S&P/TSX Composite

19,773

2.6%

-6.8%

S&P 500

4,067

3.6%

-14.7%

NASDAQ

12,112

4.1%

-22.6%

Euro Stoxx 50

3,570

0.7%

-16.9%

Hang Seng

19,362

-0.5%

-17.2%

Source: Bloomberg, RBC Wealth Management

  • TSX finished higher in Friday trading, near best levels. All sectors higher led by health care, tech, energy, materials, consumer staples and real estate. Canadian equities rose 2.6% in a weekly basis.

  • US equities were higher in Friday trading, finishing just off best levels. Each of the major averages was up more than 2.5% for the week and snapped a big three-week losing streak during which S&P lost nearly 8.5%.

  • Nothing specific behind recent bounce. Oversold conditions and depressed sentiment and positioning indicators have been back on the front burner following three-week selloff in US equities. US equities saw largest outflows in 11 weeks, while bonds saw a third straight week of inflows.

 

Economy

Canada

  • With the headline Consumer Price Index (CPI) at 7.6% in Canada in July, the inflation fight continues for the Bank of Canada as policymakers decided on September 7th to implement another rate hike of 0.75% which brings the benchmark overnight interest rate to 3.25%.

U.S.

  • The Federal Reserve policy makers recently reiterated their “unconditional” resolve to return inflation to a two percent target by continuing to raise rates and withdraw liquidity. The U.S. economy has sharply decelerated this year, prompting worries of an imminent recession.

  • Demand for workers was strong with 315,000 jobs created during the month, but supply grew by an even greater amount, as sidelined workers returned to the labour force. This resulted in an increase of 0.2% to the unemployment rate.

Further Afield

  • The European Central Bank increased the deposit rate from 0% to 0.75%, the largest rate hike since the launch of the Euro in 1999.

  • In the U.K. new prime minister Liz Truss announced a package to protect households and businesses from high energy prices, with the cost estimated to by the Financial Times to be at £150 billion.

  • The southwestern Chinese city of Chengdu has maintained strict anti-COVID restrictions and extended a lockdown in most of its downtown areas. Stringent COVID-19 containment measures continue to add pressure to China’s economic outlook.

 

Notes About Companies in Model Portfolio

  • Apple (AAPL) launched its third generation of 5G iPhones: the iPhone 14 and the new 14 “Plus” variation, with dual-cameras and OLED displays of 6.1” and 6.7”, as Apple replaced the “Mini” variation (e.g. 5.4”). Apple also launched the 14 Pro and 14 Pro Max. A 48MP main camera with a quad-pixel sensor, is worth keeping an eye on as tangible camera enhancements perceived by consumers have in the past driven strong traction from the installed base to upgrade.

    • Apple announced the Apple Watch Series 8 with updates centered around sensor capability, including temperature and Crash Detection (e.g. detect severe car crashes), as well as Low Power Mode (Series 8 battery life to reach up to 36 hours).

 

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