Market week: Bond yields rise, stocks edge down

Fed remains dovish, investors see higher rates ahead

The major North American stock indexes closed Friday near breakeven for the week, with the U.S. indexes just slightly below and the Canadian benchmark flat. Investors digested first the U.S. Federal Reserve Board’s dovish rate announcement on Wednesday, keeping the fed funds rate between 0% and 0.25%. Treasury bond yields edged up again after the announcement, with the 10-year U.S. Treasury note climbing to 1.73% by Friday’s close as markets continued to anticipate strong growth, growing inflation, and higher policy rates. On Thursday, the Fed announced that it was rescinding a temporary exemption to the rule that U.S. bank must include Treasurys in calculation of their Supplementary Leverage Ratio. The order put bank stocks under pressure, weighing on both the S&P 500 Composite Index and the Nasdaq Composite Index, both of which edged down 0.8% on the week.

Toronto’s S&P/TSX Composite Index was flat on the week, as a 6.4% drop in the price of crude oil weighed on the energy sector, with the S&P/TSX Capped Energy Index dropping 6.1% on the week. However, the index was cushioned by a weekly 6.4% rally in the S&P/TSX Capped Communication Services Index, boosted by a proposed $20 billion takeover offer of Shaw Communications Inc. (TSX: SJR.B) by Rogers Communications Inc. (TSX: RCI.B).

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Fund news

* Mackenzie renames ETF. Mackenzie Investments announced on March 15 that it is renaming Mackenzie Global Leadership Impact ETF (NEO: MWMN). Effective March 31, the fund will be named Mackenzie Global Women’s Leadership ETF. The fund’s objectives, strategies, and trading symbol will remain unchanged. In a release, Mackenzie said, “The change is being made to simplify the ETF’s name and make it more relatable to all investors, as well as to better align with its core principles and investment objectives.”

* Horizons completes fund mergers. Horizons ETFs Management (Canada) has completed the merger of its Horizons Active Emerging Markets Dividend ETF and Horizons Active US Dividend ETF into Horizons Active Global Dividend ETF (TSX: HAZ) effective as of the close of business Friday, March 12. In a release, Horizons said that HAZ “provides unitholders of each Merging ETF with the opportunity to continue their investment in a dividend-focused ETF that has a larger market capitalization and a broader, global dividend mandate, which includes equity and equity-related securities of companies with operations located anywhere in the world.”

* Purpose rakes in the bitcoin. Purpose Investments announced on March 18 that its Purpose Bitcoin ETF (TSX: BTCC) has amassed $1 billion in assets under management on its one-month anniversary.

In a release, Som Seif, CEO of Purpose, said, “When we launched Purpose Bitcoin ETF, we knew we were filling a void in the market. Hitting this milestone so quickly proves that investors are seeking convenient, safe access to cryptocurrencies and shows their confidence in our ETF as the premier vehicle for that exposure.”

The ETF invests directly in physically settled Bitcoin, not derivatives, allowing investors easy and efficient access to the emerging asset class of cryptocurrency without the associated risk of self-custody within a digital wallet. Purpose is the manager of the ETF. Ether Capital Corp. acts as a special consultant to Purpose.

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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.