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The major North American stock indexes surged to record closing levels this past Thursday and continued the trend on Friday to close with weekly gains. Fourth-quarter corporate earnings for S&P 500 companies have generally risen an estimated 0.9% from a year ago, according to a report from Reuters, with about 83% of reports released so far exceeding street estimates. Investor sentiment was further boosted by prospects for a quick passage of a US$1.9 trillion Covid-relief bill, as the Senate narrowly approved a resolution for fast-tracking the plan. In addition, the labour market added 49,000 jobs, as the unemployment rate continued its downtrend, edging down to 6.3% in January from 6.7% in December, despite third-wave pandemic lockdowns.
In Canada, the employment picture wasn’t quite as sunny as in the U.S. Driven by the second wave of the Covid-19 pandemic, the economy lost 213,000 jobs in January, adding to the 53,000 jobs lost in December, and raising the unemployment rate to 9.4% from 8.8% in December.
Market volatility triggered by massive retail trading of heavily shorted stocks like computer game retailer GameStop Corp. (NYSE: GME) and cinema operator AMC Entertainment Holdings Inc. (NYSE: AMC) faded this past week as the novelty of executing a short squeeze on deep-pocketed hedge funds wore off and many retail traders were left holding stock in failing companies with little revenue, no earnings, and no hope. Somewhat redundantly, Treasury Secretary Janet Yellen met with key regulators to assure investors that, yes, once again, the barn door has been closed long after the horses have gone.
The S&P 500 Composite Index gained 4.7% on the week, while the tech-weighted Nasdaq Composite Index rose 6.0%. Canada’s benchmark S&P/TSX Composite Index also rallied 4.6% on the week, as investors found nothing much to complain about with crude oil gaining 9.5% on the week, and prospects looking good for further gains, as the outlook global economic recovery improves with intensified Covid-19 vaccine rollout in most countries. Gold, absent any immediate crisis to hedge against, retreated 1.9% on the week.
Monitor the main stock and commodity indices daily with the Fund Library’s interactive Markets Page.
* TD shuts down five mutual funds. TD Asset Management Inc. announced on Feb. 5 plans to terminate five mutual funds on or about May 7. In a press release, it said the move was made “to simplify its offering line-up and continue to deliver value to its clients.” It plans to shut down the following funds (fund data as at Dec. 31, 2020):
* Franklin Templeton launches innovation fund. Franklin Templeton Canada on Feb. 4 debuted its Franklin Innovation Fund and sister ETF, the Franklin Innovation Active ETF (TSX: FINO), which actively invest in companies that are leaders in innovation, take advantage of new technologies, and benefit from new industry conditions in the dynamically changing global economy. The fund is managed by California-based Matt Moberg who manages innovation funds for global investors and has helmed Franklin’s U.S.-listed US$20 billion DynaTech Fund for the past 16 years.
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