Market week: U.S. indices close in on record highs

Potential progress on trade, strong earnings buoy sentiment

The major U.S. stock indices closed higher on the week, on reports of progress on the first phase of a U.S.-China trade deal that may eliminate tariffs that were schedule to come into effect on Dec. 16. While no deal had actually been announced, talks continued on Friday and U.S. trade representative Robert Lighthizer said he remained optimistic.

Investor sentiment was also buoyed on Friday by stronger-than-expected third-quarter earnings results from 78% of the S&P 500 companies that have reported financials so far. In addition, there’s a strong consensus of opinion that the U.S. Federal Reserve Board will announce another rate cut at its meeting on Oct. 29-30.

The lighter mood helped lift the S&P 500 Composite Index to a 1.2% gain on the week, as the blue-chip gauge ended Friday just shy of it’s all-time record close, while the Nasdaq Composite Index advanced nearly 2%, also very near its record closing high. And with crude oil surging 5.5% on the week, the energy sector helped the S&P/TSX Composite Index stay just above water, with a marginal weekly gain of 0.2%.

Index	Oct. 25, 2019, close	Day	Week	Year to Date
S&P/TSX Composite	16,404.49	0.2%	0.17%	14.53%
S&P 500 Composite	3,022.55	0.4%	1.22%	20.57%
Nasdaq Composite	8,243.12	0.7%	1.90%	24.23%
Gold (US$)	$1,503.60	0.3%	1.10%	17.50%
Oil (WTI) (US$)	$56.63	0.7%	5.48%	24.71%

FUND NEWS

* Empire Life launches passive/active seg fund suite. The Empire Life Insurance Company on Oct. 23 announced a six-fund suite under the Empire Life Multi-Strategy GIF banner, along with two new standalone funds.

According to a release, the Empire Life Multi-Strategy GIFs provide exposure to exchange traded funds (ETFs) and actively managed investments from third-party managers within one segregated fund solution. The aim is to provide diversification through multiple investment styles, which may reduce risk and help deliver more consistent returns, while the tactical management component aims to take advantage of market opportunities. The new suite of funds includes three equity and three global balanced funds:

Empire Life Multi-Strategy Canadian Equity GIF
Empire Life Multi-Strategy U.S. Equity GIF
Empire Life Multi-Strategy Global Equity GIF
Empire Life Multi-Strategy Global Conservative Portfolio GIF
Empire Life Multi-Strategy Global Balanced Portfolio GIF
Empire Life Multi-Strategy Global Moderate Growth Portfolio GIF

Investment objectives range from capital protection to growth and each fund combines passive, smart beta, and actively managed strategies. Dave Paterson is the portfolio manager of the Empire Life Multi-Strategy GIFs. More information can be found at the Empire Life website.

Ian Hardacre, Senior Vice-President and Chief Investment Officer, at Empire Life said, “Through passive and active strategies, the Empire Life Multi-Strategy GIFs provide exposure across investment styles, geographies, and industry sectors to increase diversification.”

Two new standalone funds include the following:

Empire Life Global Dividend Growth GIF has been reopened for GIF clients. The fund holds a portfolio of high-quality dividend-producing companies with primarily mid to large market capitalization from around the world. Ashley Misquitta and David Mann are the managers of the fund.

Empire Life Short Term High Income GIF holds a diversified fixed-income portfolio focused on short-term, higher-yielding corporate bonds. Albert Ngo is the manager of the fund.

* Canada Life resets Pathways lineup. Canada Life and Quadrus announced on Oct. 24 that its London Life Pathways mutual funds will be renamed the Canada Life Pathways mutual funds. There are no changes to the funds’ objectives or managers. The funds are managed by Mackenzie Investments and are offered exclusively through Quadrus Investment Services Ltd.

In addition, Pathways mutual funds will expand its offerings to include unbundled fee series (QF and QFW) and High Net Worth series (N), expected to be available to advisors on Oct. 28 subject to approvals.

* Mackenzie debuts EM local currency bond ETF. Mackenzie Investments announced that its new Mackenzie Emerging Markets Local Currency Bond Index ETF (TSX: QEBL) began trading on Oct. 24. The fund aims to provide Canadian investors with the opportunity to access growth and diversification benefits of investing in emerging markets. The fund tracks the Solactive EM Local Currency Government Bond Select NTR Index. Management fee is 0.45%.

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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.