Market week: Markets rally on inflation, trade reports

China and U.S. negotiating trade concessions

The major North American stock indices rallied again this week, buoyed by reports that China and the U.S. were negotiating trade concessions that would see China increase imports from the U.S. to bring its trade deficit with the U.S. to zero. In Canada, December’s all-items inflation rate ratcheted up to an annual 2.0% from 1.7% in November, a move largely driven by the way airfares are calculated, and one widely expected to reverse in coming months. U.S. annual inflation decelerated to 1.9% as December’s month-over-month rate fell 0.1% as energy prices declines. The calmer inflation picture in both countries suggests both the Bank of Canada and the Federal Reserve have plenty of wiggle room to ease off further rate hikes in the immediate future. Toronto’s S&P/TSX Composite Index gained 2.4% on the week, helped along by a 4.2% rise in the price of crude oil. The main U.S. indices followed suit, with the S&P 500 Composite gaining 2.9% on the week, and the Nasdaq Composite rising 2.7%.

Index	Jan. 18, 2019, close	Day	Week	Year to Date
S&P/TSX Composite	15,303.83	0.6%	2.44%	6.85%
S&P 500 Composite	2,670.71	1.3%	2.87%	6.54%
Nasdaq Composite	7,157.23	1.0%	2.66%	7.87%
Gold (US$)	$1,281.30	-0.9%	-0.54%	0.13%
Oil (WTI) (US$)	$53.76	3.3%	4.15%	18.39%

FUND NEWS

* Fidelity debuts Canada/U.S. fund. Fidelity Investments Canada this week launched its new Fidelity CanAm Opportunities Class co-managed by Mark Schmehl and Steve MacMillan. The all-cap fund has a focus on the Canadian and U.S. markets and combines the two managers’ investment styles, targeting strong risk-adjusted returns and lower volatility.

* BMO launches new dividend ETF. BMO Investments Inc. debuted the ETF Series units for its actively-managed BMO Tactical Dividend ETF Fund (TSX: ZZZD). The fund invests primarily in dividend-paying ETFs and also capitalizes on short-term investment strategies. The fund is sub-advised by veteran manager Larry Berman of ETF Capital Management.

Check Fund Library’s Market Activity page regularly for active updates on key market indexes and commodities.

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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.