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The major North American stock indexes turned in an uninspiring performance on the week, as the S&P/TSX Composite Index closed marginally above breakeven, up just 0.2%. The Canadian benchmark is ahead 2.9% year to date, supported in the past month by a weakening U.S. dollar. The S&P 500 Composite Index retreated nearly 1.0% on the week and the Nasdaq Composite Index edged down 0.7%, as investors fretted over a stalled relief program in Congress and stalled Brexit talks between the U.K. and the European Union. U.S. inflation, meanwhile, edged up slightly month over month in November but remained unchanged year over year for both the all-items index (1.2%) and the core index (1.6%). Gold remained flat on the week, while crude oil closed 1.0% higher.
In company news, electric vehicle manufacturer Tesla Inc. is set to join the S&P 500 Composite Index on Dec. 18, replacing real estate investment trust Apartment Investment Management Co. Valued at some US$460 billion, Tesla will comprise a weighting of between 1.5% and 1.6% on the index, making it the largest company by market value to be added to the index. Some analysts have pointed out that the inclusion of Tesla will necessitate massive rebalancing of portfolios and possible attendant volatility on the index, as over US$5 trillion in investment funds is benchmarked to the S&P 500 Composite.
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Fund news
* Horizons ETFs launches absolute return bond ETF. Horizons ETFs Management on Dec. 7 debuted its Horizons Tactical Absolute Return Bond ETF (TSX: HARB) (Total Return Series) and TSX: HARB.J (Dividend Series Shares).
The fund aims for absolute returns with low volatility over a market cycle by tactically taking long and short positions in North American and global debt instruments and derivatives across the credit spectrum. The ETF is sub-advised by DMAT Capital Management, a boutique portfolio management firm founded by fixed-income manager Barry Allan
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