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 catch up on the past four weeks’ Weekly Update in the link to my Blog.

Read my latest Smart Investor newsletter on my website. The Q1 2024 edition covers Market Review for 2023, a Turning Point on interest rates, and advantages of Bonds. Plus my Book List for 2023.

 

Markets

Market scorecard as of close on Friday April 5, 2023.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	22,264	0.4%	6.2%
U.S.	S&P 500	5,204	-0.8%	9.1%
U.S.	NASDAQ	16,249	-0.8%	8.2%
Europe/Asia	MSCI EAFE	2,317	-1.4%	3.6%

Source: FactSet

• Canadian equities finished sharply higher Friday, near best levels. All sectors higher. TSX managed a 0.4% weekly gain, higher for an eighth straight week (longest winning streak in over 5 years).

• US equities closed higher in Friday trading, though major US indices finished lower for the week. Momentum and growth were the standouts from a factor perspective, though value ended higher as well. Treasuries were notably weaker with the curve flattening.

 

Economy

Canada

• Canadian employment edged down 2k in March. The change in employment itself is small - and entirely accounted for by a pullback in self-employment - but the numbers look significantly weaker when measured against another surge in population (91k) in March and rising labour supply. The unemployment rate jumped another 0.3 percentage points to 6.1%. That is up 1.3 percentage points from its post-pandemic low and roughly half a percent above pre-pandemic levels.

• The Bank of Canada has released its Business Outlook Survey, with the broad consensus pointing towards sluggish business conditions given a weakening consumer backdrop.

U.S.

• From household survey, the unemployment rate in the U.S. dropped slightly to 3.8%, from 3.9% in February. The labour force participation rate in the meantime ticked higher to 62.7% but was very little changed from a year ago and also still below the level in pre-pandemic 2020.

• On Wednesday, Fed Chair Jerome Powell signaled that policymakers are waiting to see more signs of disinflation before deciding interest rate cuts are appropriate. Other members of the Federal Open Market Committee have said repeatedly they’re in no hurry to cut rates at this point. Nonetheless, we’re still forecasting rate cuts in the pipeline for 2024 given increased pressure in certain areas of the economy.

Further Afield

• The data this week does little to derail our view of European Central Bank (ECB) interest rate cuts commencing in June. On the inflation front, preliminary headline price growth fell to 2.4% y/y in March from 2.6% y/y in February.

• The Caixin/S&P Global China Manufacturing Purchasing Managers’ Index (PMI) reached 51.1 in March, its highest level in more than a year, a sign to us that economic growth in China is stabilizing.

 

Notes About Companies in Model Portfolio

• Dollarama Inc. (DOL) reported on Thursday its financial results for the fourth quarter and fiscal year ended January 28, 2024. In fiscal 2024 sales increased 16.1% to $5,867.3 million, compared to $5,052.7 million in 2023. Operating income increased 25.5% to $1,495.7 million, representing an operating margin of 25.5%, compared to 23.6%.

• Johnson & Johnson (JNJ) has entered into a definitive agreement to acquire all outstanding shares of Shockwave for $335.00 per share in cash, corresponding to an enterprise value of approximately $13.1 billion including cash acquired. Shockwave is a leading, first-to-market provider of innovative intravascular lithotripsy (IVL) technology for the treatment of calcified coronary artery disease and peripheral artery disease.

 

 

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