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Fears of a resurgent COVID-19 and a downbeat economic assessment from the U.S. Federal Reserve Board Chairman Jerome Powell put the major North American stock indices into a nosedive on Thursday, leading to steep losses on the week despite a weak rally on Friday.
On a rolling seven-day basis, several states reported increases of between 30% and 40% in new COVID-19 cases for the week ending June 7.
On Wednesday, the U.S. Fed released its revised policy statement, which projects a 6.5% annual contraction in economic growth year-end, along with an unemployment rate of 9.3%. Previously the Fed had projected unemployment at 4.1%. In addition, Richmond Fed President Tom Barkin indicated on Friday that the effects of the pandemic could last longer than just a couple of months, and that many of the jobs lost to the pandemic may never return.
Toronto’s benchmark S&P/TSX Composite Index fell 3.8% on the week, dragged down by weekly losses in the key energy and financial sectors. West Texas Intermediate crude oil lost 6.2% on the week, contributing to the 12.8% decline in the S&P/TSX Capped Energy Index for the week. Similarly, the bleak economic outlooks released by the U.S. Fed and the International Monetary fund pressured the big bank stocks, for a 4% loss for the S&P/TSX Capped Financials Index on the week.
The broad U.S. blue-chip S&P 500 Composite Index lost 4.8% on the week, while the technology-weighted Nasdaq Composite Index fell 2.3%. Of the major indices, only the Nasdaq Composite remains in the black for the year to date, up 6.9%, still riding on the strength of the information technology majors like Amazon.com Inc., up 38% year to date, Microsoft Corp. (up 19%), and Netflix Inc. (ahead 23%).
Fund news and updates
* Fidelity launches new factor ETFs. Fidelity Investments Canada on June 10 debuted a new suite of factor-based value and momentum index ETFs.
Fidelity Canadian Value Index ETF (TSX: FCCV) tracks the Fidelity Canada Canadian Value Index of large and mid-cap Canadian companies that have attractive valuations.
Fidelity U.S Value Index ETF (TSX: FCUV) tracks the Fidelity Canada U.S. Value Index of large and mid-capitalization U.S. companies that have attractive valuations.
Fidelity U.S. Value Currency Neutral Index ETF (TSX: FCVH) tracks the Fidelity Canada U.S. Value Currency Neutral Index of large and mid-cap U.S. companies that have attractive valuations and uses derivatives to try to minimize the exposure of currency fluctuations between the U.S. and Canadian dollars.
Fidelity International Value Index ETF (TSX: FCIV) tracks the Fidelity Canada International Value Index of large- and mid-cap foreign companies that have attractive valuations.
Fidelity Canadian Momentum Index ETF (TSX: FCCM) tracks the Fidelity Canada Canadian Momentum Index of large and mid-cap Canadian companies that exhibit positive momentum signals.
Fidelity U.S. Momentum Index ETF (TSX: FCMO) tracks the Fidelity Canada U.S. Momentum Index of large- and mid-cap U.S. companies that exhibit positive momentum signals.
Fidelity U.S. Momentum Currency Neutral Index ETF (TSX: FCMH) tracks the Fidelity Canada U.S. Momentum Currency Neutral Index of large- and mid-capitalization U.S. companies that exhibit positive momentum signals and uses derivatives to try to minimize the exposure of currency fluctuations between the U.S. and Canadian dollars.
Fidelity International Momentum Index ETF (TSX: FCIM) tracks the Fidelity Canada International Momentum Index of large- and mid-cap foreign companies that exhibit positive momentum signals.
Fidelity also announced the launch of Fidelity Global Investment Grade Bond ETF (TSX: FCIG) and sister mutual fund Fidelity Global Investment Grade Bond ETF Fund from fixed-income experts Jeff Moore and Michael Plage. The fund invests globally in high-quality investment-grade fixed-income securities, with a maximum 25% exposure to non-investment grade bonds.
Monitor the main stock and commodity indices daily with the Fund Library’s interactive Markets Page.
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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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