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Trade jitters led the major market gauges to steep monthly losses for May, as the Chinese and the U.S. administrations exchanged tariff threats through the month and no progress was made in trade negotiations. Meanwhile, U.S. President Donald Trump ended the month with a threat to raise tariffs on Mexican goods to 25% by Oct. 1 unless Mexico “substantially stops the illegal inflow of aliens coming through its territory.” Traders were further rattled by Chinese government threats to retaliate against the U.S. for restricting the ability of tech giant Huawei and other Chinese companies under the government’s control to do business in the U.S.
The S&P 500 Composite Index logged a 2.6% retreat on the week, and posted a 6.6% loss for the month of May, its steepest slide for May since 2010. Likewise, the tech-weighted Nasdaq Composite Index lost 2.4% on the week, registering an 8% loss for the month overall. Toronto’s benchmark S&P/TSX Composite Index also lost ground, though not as significantly as the U.S. gauges. Energy, financial, and healthcare sectors led the S&P/TSX Composite to a weekly loss of 1.2%, for a drop of 3.3% in May. The index’s outsize weighting to energy contributed to weakness through the month as crude oil plummeted 16.5% in May.
| Index | May 31, 2019 close | Day | Week | Year to date | May 2019 |
|---|---|---|---|---|---|
| S&P/TSX Composite | 16,037.49 | -0.3% | -1.19% | 11.97% | -3.28% |
| S&P 500 Composite | 2,752.06 | -1.3% | -2.62% | 9.78% | -6.58% |
| Nasdaq Composite | 7,453.15 | -1.5% | -2.41% | 12.33% | -7.93% |
| Gold (US$) | $1,310.20 | 1.4% | 1.59% | 2.38% | 2.14% |
| Oil (WTI) (US$) | $53.35 | -5.7% | -9.51% | 17.49% | -16.52% |
Monitor the main stock and commodity indices daily with the Fund Library’s interactive Markets Page.
FUND NEWS
* IA Clarington renames some funds, changes managers. IA Clarington Investments Inc. announced on May 30 that it is renaming three funds effective immediately.
IA Clarington Sarbit U.S. Equity Fund becomes the IA Clarington U.S. Equity Currency Neutral Fund.
IA Clarington Sarbit U.S. Equity Class (Unhedged) changes its name to IA Clarington U.S. Equity Class.
IA Clarington Focused U.S. Equity Class is renamed IA Clarington Thematic Innovation Class.
The name changes coincide with management changes at these and six other funds. IA Clarington said in its release that the objective of each fund would be unchanged.
* Harvest shuts down income ETF. Harvest Portfolios Group Inc. announced on May 29 that it will terminate the Harvest Banks & Buildings Income ETF (TSX: HCBB) effective at the close of business on Wednesday, July 31, 2019. The aim of the ETF when launched last March was to invest in financial and real estate issues with the aim of producing monthly income. However, with less than $3 million in assets, the ETF has struggled to gain investor interest. Monday, July 29, 2019, is expected to be the last date on which a redemption may be placed with Harvest, before the fund is delisted from the TSX on July 31.
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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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