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Weekly market wrap Feb. 23, 2018: Stocks post second straight week of gains
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By Fund Library News Wire  | Friday, February 23, 2018


By Mike Keerma

* Stocks post second straight week of gains.
* Vanguard plans actively-managed mutual funds.

* Stocks post second straight week of gains. North America’s big market indices again made gains on the week, continuing their retracement from steep losses suffered at the beginning of the month. Sentiment was buoyed by the U.S. Federal Reserve Board’s semi-annual report to Congress, which forecast continuing improvement in the U.S. economy with inflation continuing to hover near the Fed’s 2% target rate, but did not indicate further aggressive monetary policy tightening. The S&P 500 Composite Index posted its second straight weekly gain, rising 0.6%, while the Nasdaq Composite Index advanced 1.4%. Toronto’s S&P/TSX Composite Index rallied on Friday, supporting a 1.2% advance for the week, boosted by a 3.5% weekly gain in the energy index as crude oil rose 3.1% on the week. Gold retreated 1.6% on the week. Investors largely shrugged off the 0.5% seasonally-adjusted monthly increase in Canada’s January inflation rate (1.7% annualized).

In company news, Canada’s largest grocery chain Loblaw Cos. Ltd. (TSX: L) reported lower profits in its fourth-quarter financials, as a total of $422 million in charges related to the merger of its two main loyalty cards, a bread price-fixing scheme, and restructuring costs put a dent in the bottom line. The company reported net earnings of $19 million for the quarter ($0.05 per share), down from $201 million ($0.50 per share) in the same period a year ago.

Meanwhile on Thursday, Canadian Imperial Bank of Commerce (TSX: CM) kicked off bank earnings reports with quarterly earnings of $1.41 billion ($3.18 per diluted share), up from $1.15 billion ($2.89 per share) a year earlier. The bank also hiked its quarterly dividend by $0.03 per share, to $1.33.

And on Friday, Royal Bank of Canada (TSX: RY) reported net income of $3.0 billion ($2.01 per diluted share) for the quarter, which reflects a $178 million write-down of net deferred tax assets. That compares with roughly the same net income ($1.97 per diluted share) in the same period a year ago. The bank also raised its quarterly dividend by $0.03 per share, to $0.94.


* Vanguard plans actively-managed mutual funds. Vanguard Investments Canada Inc. announced it has filed a preliminary prospectus for four actively managed mutual funds, representing a first for the company, which has so far stuck to its ETF offerings in Canada. Vanguard says the funds are expected to have a maximum management fee of 0.50% for Series F.

Vanguard Global Balanced Fund aims for long-term capital growth and some current income. It will be subadvised by Wellington Management Canada.

Vanguard Global Dividend Fund targets above-average current income together with long-term capital growth. This fund will be subadvised by Wellington Management and The Vanguard Group, Inc., including Vanguard’s Quantitative Equity Group.

Vanguard US Value Windsor Fund seeks long-term capital appreciation and income. Wellington Management Canada, Pzena Investment Management LLC, and The Vanguard Group will be subadvisors.

Vanguard International Growth Fund aims for long-term capital appreciation and will be subadvised by Baillie Gifford Overseas Ltd., Schroder Investment Management North America Inc., and The Vanguard Group.

Check Fund Library’s Market Activity page regularly for active updates on key market indexes and commodities.

@FundLibrary – Follow Fund Library on Twitter for daily information and updates.


© 2018 by Fund Library. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited.

The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.

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