Market week: Retail slump sinks stocks

U.S. April sales data worse than expected

A larger-than-expected drop in U.S. retail sales during April weighed on the big North American stock market indices last week. The U.S. Commerce Dept. reported a 16.4% decline, significantly larger than the consensus estimate for a 12.5% drop, as most retail stores were required to shut down in the month because of the Covid-19 pandemic. Also dragging down sentiment was a Federal Reserve Board report indicating that industrial production fell 11.2% in April, the largest decline in the 101 years that the data has been tracked.

The U.S. blue-chip S&P 500 Composite Index retreated 2.3% on the week, while the technology-weighted Nasdaq Composite Index lost 1.2%, but remained 0.5% ahead year to date, buoyed by the strong performance of the big tech stocks.

Canada fared no better, as Statistics Canada’s data for March showed an 11% slump in manufacturing sales, with April numbers expected to be even worse. Toronto’s stock gauge, the S&P/TSX Composite Index, fell 2.2% on the week. Even a 20% weekly gain in the price of crude oil, reacting in part to a drop in U.S. crude oil stockpiles, wasn’t enough to support Toronto’s market. A slide in financial issues kept the index under pressure, as the S&P/TSX Capped Financials Index lost 5.5% on the week.

FUND NEWS AND UPDATES

* Horizons consolidates shares of three ETFs. Horizons ETFs Management (Canada) announced on May 14 that it will consolidate the shares of three of its commodity-linked ETFs effective May 25.

BetaPro Canadian Gold Miners -2x Daily Bear ETF (TSX: HGD) (1:2 ratio).
BetaPro Natural Gas 2x Daily Bull ETF (TSX:HNU) (1:5 ratio).
BetaPro Silver -2x Daily Bear ETF (TSX: HZD) (1:2 ratio).

* CI launches DoubleLine funds. CI Investments Inc. on May 12 debuted three new fixed-income funds sub-advised by DoubleLine Capital LP and its CEO, Jeffrey Gundlach. The three funds are offered as both mutual funds and exchange-traded funds (ETFs) in Canadian dollar (hedged and unhedged) and U.S. dollar series.

CI DoubleLine Total Return Bond US$ Fund (ETF listed on the TSX under the symbol CDLB). The fund holds securitized investments and other fixed-income securities issued by the U.S. government or other issuers.
CI DoubleLine Core Plus Fixed Income US$ Fund (ETF listed on the TSX under the symbol CCOR). The fund invests in a portfolio of fixed-income securities of any maturity from anywhere in the world.
CI DoubleLine Income US$ Fund (ETF listed on the TSX under the symbol CINC). The portfolio holds a combination of securitized assets and other income-producing securities of varying characteristics, selected for their potential to provide a high level of current income, capital appreciation or both.

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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.