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North American stock indexes posted solid gains for the week, as traders focused on the massive liquidity fuelling economic growth and underpinning stock market advances. Central bank policy rates remain at historical lows, as bankers signal a willingness to maintain ultra-easy money policies through both low rates and bond purchases. Investors appear willing to overlook the prospect of increasing inflation as a tradeoff for strong post-pandemic economic growth and consequently higher corporate earnings. The only note of concern in last week’s relatively light stream of data reports was the U.S. Labor Department’s producer price index, which rose 1% in March. The U.S. Federal Reserve has already indicated it expects inflation to spike above 2% this year but level off back to 2%.
The S&P 500 Composite Index advanced 2.7% on the week, while the Nasdaq Composite Index gained 3.1% as the big technology stocks rallied from what some analysts felt was an oversold position. Toronto’s S&P/TSX Composite Index ralled 1.2% on the week as Canada’s delayed Covid-19 vaccine rollout gained some momentum and economic recovery continued to create a boom in the labor market, with 303,000 new jobs created in March, following the addition of 259,000 in February.
The price of crude oil retreated 3.1% on the week, remaining ahead 22% year to date on continuing expectations of strong global economic recovery. Gold remained flat on the week, and is down 8% year to date as investors chase gains in hot equity markets.
Monitor the main stock and commodity indexes daily with the Fund Library’s interactive Markets Page.
* RBC shuts down three mutual funds. RBC Global Asset Management Inc. announced on April 5 that it will terminate BlueBay $U.S. Global Convertible Bond Fund (Canada), BlueBay $U.S. Global Convertible Bond Class (Canada), and RBC Global Bond & Currency Fund effective June 25. Unitholders may redeem or switch their holdings in the funds until market close on June 23. Any remaining units will be redeemed and the proceeds distributed to unitholders.
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