Market week: Stocks roll on to new highs

Delta variant, rising bond yields cloud outlook

North America’s main stock market indexes closed near record highs again this past week, as investor sentiment was buoyed by a better-than-expected U.S. employment report, which showed the economy added 940,000 jobs in July, as the U.S. unemployment rate fell to 5.4% from 5.9% in June. Still, the outlook was clouded by concerns over the growing number of Covid-19 delta variant cases as well as a 7 basis point uptick in the yield on the 10-year U.S. Treasury note to end at 1.288% on Friday.

With a robust vaccination rollout across the country and the easing of Covid-19 restrictions, the Canadian economy added 94,000 jobs in July, while the unemployment rate remained relatively unchanged at 7.5% compared with 7.8% in June. Meanwhile, the Canadian housing market weighed on economic growth in May, as gross domestic product slipped 0.3% in the month, but was still up 14.6% year-over-year. However, in its flash estimate, Statistics Canada projected 0.7% GDP growth for June month-over-month, and 6.5% annualized growth for the second quarter.

Toronto’s benchmark S&P/TSX Composite Index gained 0.9% on the week, adding to it 0.6% advance in July. The blue-chip S&P 500 Composite Index advanced 0.9% on the week, setting a new record high close, following a 2.3% gain in July. And the technology-weighted Nasdaq Composite Index rose 1.1% on the week, padding out its 1.2% gain for July. Crude oil slumped 8.2% on the week as U.S. oil inventories climbed and traders worried that rising cases of the Covid delta variant would dampen demand, while gold backed off 3.0%.

Fund news

* NEI merges and revamps Growth & Income funds. NEI Investments announced on Aug. 5 that NEI Growth & Income Fund will merge into NEI Select Growth & Income RS Portfolio with a change to the investment objectives, investment strategies, and sub-advisor. The merged fund will be renamed the NEI Global Equity Fund. The fund will be managed by Baillie Gifford Overseas Ltd. and will aim for long-term growth by investing in a global portfolio of equities, which include common stock and other equity securities of issuers located in countries throughout developed and emerging markets. The fund will follow a responsible approach to investing.

Monitor the main stock and commodity indexes daily with the Fund Library’s interactive Markets Page.

@FundLibrary – Follow Fund Library on Twitter for daily information and updates.

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.