Market week: U.S. GDP growth buoys markets

S&P/TSX breaks even

A higher-than-expected reading on U.S. economic growth in the first quarter helped buoy U.S. stock indices to solid weekly gains, with both the blue-chip S&P 500 Composite Index and the Nasdaq Composite Index registering record-setting highs at Friday’s close. This despite softer earnings reports from Dow components Intel Inc. (NASDAQ: INTC) and Exxon Mobil Corp. (NYSE: XOM). The S&P 500 gained 1.2% on the week, while the Nasdaq gained 1.9% and is ahead 23% year to date. Against a backdrop of softening crude oil prices, which dropped 1.9% on the week, Toronto’s S&P/TSX Composite Index broke even week-over-week, as the Bank of Canada gave a downbeat forecast on its economic outlook, kept its target overnight rate on hold at 1.75%, and announced that it is abandoning its rate-hike bias.

Index	April 26, 2019, close	Day	Week	Year to date
S&P/TSX Composite	16,613.46	0.2%	0.00%	15.99%
S&P 500 Composite	2,939.88	0.5%	1.20%	17.27%
Nasdaq Composite	8,146.40	0.3%	1.85%	22.77%
Gold (US$)	$1,288.10	0.7%	0.80%	0.66%
Oil (WTI) (US$)	$62.80	-3.7%	-1.88%	38.30%

U.S. gross domestic product grew at an annual 3.2% rate in the first quarter of the year, exceeding street estimates of 2.3%. Economists pointed to a surge in inventory stockpiling in the period, combined with a drop in imports as the main drivers of growth in the quarter, even as other components, such as business investment, residential real estate, and inflation slowed.

In Canada, the Bank of Canada last week kept its key policy rate unchanged at 1.75%, as Bank of Canada Governor Stehen Poloz said in a press conference that in its rate decision, the BoC “chose to remove the reference to the need for interest rates to return into a neutral range,” which its has revised to 2.25–3.25 per cent. The Bank’s policy stance has become decidedly dovish as it scales back its growth outlook for the Canadian economy.

FUND NEWS

* Mackenzie to merge three funds. Mackenzie Investments announced on April 26 plans to merge three funds:

Mackenzie Canadian Balanced Fund will be merged into Mackenzie Strategic Income Fund.
Mackenzie US Strategic Income Fund will merge with Mackenzie Global Strategic Income Fund
Mackenzie US Dividend Registered Fund will fold into Mackenzie US Dividend Fund

The mergers are expected to be effective Aug. 16, pending approvals.

* First Asset ETFs to be rebranded with CI moniker. First Asset Investment Management and affiliate CI Investments Inc. announced on April 22 that First Asset ETFs will be rebranded as “CI First Asset ETFs” effective April 29, 2019.

Rohit Mehta, President of First Asset and Executive Vice-President, CI Financial Corp. (parent company of CI and First Asset) explained the move this way: “The new branding reflects the growing synergies between our firms. We are bringing together First Asset’s specialized experience in smart beta and actively managed ETFs with CI’s strength in investment management and its extensive national reach.” The ticker symbols for renamed ETFs will not change.

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

Disclaimer

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.