Market week: Stock indices surge in January

Explosive U.S. job growth

The main North American market gauges posted gains for another week, against a backdrop of rising U.S. job creation and growing manufacturing activity. The blue-chip S&P 500 Composite Index gained 1.6% on the week, posting a 7.9% advance in January. The tech-weighted Nasdaq Composite Index rose 1.4% on the week, gaining 9.5% in the month. Meanwhile, Toronto’s S&P/TSX Composite Index rallied 1.0% on the week, gaining 8.5% in January overall, as crude oil prices rose 3.3% in the week, and surged 18.5% in the month.

Index	Feb. 1, 2019, close	Day	Week	Year to Date	Jan. 31, 2019, close	January 2019
S&P/TSX Composite	15,506.31	-0.2%	0.91%	8.26%	15,540.60	8.50%
S&P 500 Composite	2,706.53	0.1%	1.57%	7.97%	2,704.10	7.87%
Nasdaq Composite	7,263.87	0.3%	1.38%	9.47%	7,281.74	9.74%
Gold (US$)	$1,322.40	-0.2%	1.09%	3.34%	1,325.20	3.56%
Oil (WTI) (US$)	$55.34	2.9%	3.28%	21.87%	53.79	18.45%

The U.S. economy added 304,000 new jobs in January, exceeding analysts’ estimates by a wide margin. The unemployment rate ticked up to 4.0% from 3.9% in January, a result mostly of temporarily laid-off federal government workers owing to a partial government shutdown in the month. Wages rose only 0.1% in the month, keeping annual wage growth at 3.2%, feeding into stronger consumer spending and the potential for another rate hike from the Federal Reserve this year.

Canadian gross domestic product shrank 0.1% in November, for the third time in the past four months. That kept the annual GDP growth rate down to 1.7% in November. Expected softer growth in the energy sector is likely to keep GDP growth under pressure in coming months, giving the Bank of Canada some breathing space to stand on the sidelines for rate hikes in the first half of the year.

FUND NEWS

* Bridgehouse announces fund mergers. Bridgehouse Asset Managers, the retail trade name for Brandes Investment Partners & Co., proposes to merge the Brandes Global Balanced Fund, Sionna Monthly Income Fund, and Sionna Diversified Income Fund into Sionna Canadian Balanced Fund. It also plans to merge Sionna Canadian Small Cap Equity Fund into Sionna Opportunities Fund. These are expected to take place on May 3, subject to approvals.

Bridgehouse also announced the merger of Brandes U.S. Small Cap Equity Fund into Brandes Global Small Cap Equity Fund, effective Aug. 23.

* Evolve shuts down three ETFs. Evolve Funds Group Inc. announced the terminatation of Sphere FTSE Europe Sustainable Yield Index ETF (TSX: SHE), Sphere FTSE Canada Sustainable Yield Index ETF (TSX: SHC), and Evolve Blockchain ETF (TSX: LINK) on or about March 28.

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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.