Shiuman Ho's Weekly Update -- Monday November 28, 2022

Shiuman Ho's Weekly Update -- Monday November 28, 2022

十一月 28, 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 November 25, 2022.

Equity Indices

Level

1 week

YTD

S&P/TSX Composite

20,384

2.0%

-4.0%

S&P 500

4,026

1.5%

-15.5%

NASDAQ

11,226

0.7%

-28.2%

Euro Stoxx 50

3,962

1.0%

-7.8%

Hang Seng

17,574

-2.3%

-24.9%

Source: Bloomberg, RBC Wealth Management

  • TSX finished higher in Friday afternoon trading in a range-bound session. Most sectors higher, utilities, real estate, consumer staples, communication services, consumer discretionary, financial, industrials and health care the leaders with energy, tech and materials the laggards. Canadian equities recorded a 2% gain for the week.

  • US equities finished little changed in range-bound Friday trading. S&P 500 was little changed and Nasdaq lower after back-to-back gains on Tuesday and Wednesday, though both still finished the week higher. U.S. markets were closed for Thanksgiving on Thursday.

 

 

Economy

Canada

  • BoC Governor Tiff Macklem told MPs interest rates need to rise to fight inflation. The governor noted inflation has come down in recent months, but we have yet to see a generalized decline in price pressures. Macklem noted the tightening phase will drag to a close, but Canada is not yet there. He added lifting pandemic stimulus sooner would have limited inflation.

U.S. 

  • As expected, the minutes from the FOMC's 1-2 November meeting reflect member discussions about next steps. There was a general acknowledgement inflation risks remained skewed to the upside while risks to the economic outlook are weighted to the downside.

  • However, also noted tentative signs labor market is coming into better balance and observed inflation expectations remained well anchored. Also noted a high degree of uncertainty due to lagged effects of policy actions. In this climate, participants felt a slower pace of hikes would better allow them to assess progress in the fight against inflation, while several also argued overtightening could raise economic risk.

Further Afield 

  • Covid restrictions tightening across China as daily infections hit record high (Bloomberg). Weeks after Beijing issued its 20 point guide on relaxing aspects of Covid Zero policy, several cities have imposed broad restrictions on movement, instituted mass testing and imposed district-wide lockdowns. Mainland media have warned against interpreting refinement of Covid rules as a relaxation or opening up.

  • European Central Bank (ECB) Executive Board member Schnabel dampened expectations for move towards more moderate pace of tightening. At a London conference, Schnabel highlighted markets' expectations of a pivot have worked against efforts to withdraw policy accommodation, bringing actual stance further from what is required to bring inflation back to target.

 

Notes About Companies in Model Portfolio

  • Disney (DIS) The re-opening of Shanghai Disneyland and Toy Story Hotel, together with the recent re-opening of Disneytown, Wishing Star Park and Shanghai Disneyland Hotel will mark Shanghai Disney Resort's return to full operations. All guests entering Shanghai Disneyland will be required to display their negative Nucleic Acid Test (NAT) taken within 48 hours (from result time), effective 25-Nov. All guests entering other areas of Shanghai Disney Resort will continue to be required to display negative NAT taken within 72 hours.

  • Microsoft (MSFT) Statkraft AS, Europe's largest generator of renewables, will provide Microsoft with 366 MW of wind and solar energy, marking the supplier's first power-purchase agreement in Ireland. The renewable power will come from three wind and three solar projects located across the country; Statkraft AS will fund and manage their construction. Timeframe and financial terms were not disclosed.

  • TD Bank (TD) announced the extension of its credit card program agreement with Nordstrom, Inc. (JWN), pursuant to which TD will continue as the exclusive issuer of Nordstrom's U.S. Visa and private label consumer credit cards. TD first acquired Nordstrom's credit card portfolio in 2015.

 

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