Market week: Stock indexes follow consumer sentiment down

Inflation fears weigh on outlook

After a run of strong gains over the past few weeks, the major North American stock index posted weekly losses, despite optimism about early quarterly earnings reports. Investor sentiment followed consumer sentiment down, on the release of the University of Michigan’s consumer sentiment index to 80.8 in July from 85.5 in June. The survey also indicated that consumers are expecting inflation to jump to 4.8% in 2021. While the U.S. Federal Reserve continues to assure markets that the jump in inflation is “transitory,” consumers faced with noticably higher prices for goods and services are skeptical, with some of that skepticism now bleeding into stock markets.

Toronto’s benchmark S&P/TSX Composite Index saw the biggest retreat on the week, falling 1.3% as crude oil fell 4.3%. Gold remained nearly flat, gaining a marginal 0.2% on the week. In the U.S. the blue-chip S&P 500 Composite Index dropped 1.0% on the week, while the technology-weighted Nasdaq Composite Index posted a 1.9% loss on the week.

Fund news

* Mackenzie launches tax-efficient fund. Mackenzie Investments on July 14 debuted its Mackenzie Tax-Managed Global Equity Fund, which aims for long-term tax-effective rates of return by investing in companies of any size, anywhere in the world. The fund is open only to non-registered investors.

Co-managed by Mackenzie’s Ome Saidi and Katherine Owen, the fund will look for high-quality global businesses that reside at or near the top of the value chain within their respective industries. The managers will be style-agnostic across the value-growth spectrum and employ tax overlay strategies to reduce taxable distributions both in the form of income and capital gains.

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