Market week: Marking time

Market week: Marking time

Traders stifle yawns at trade, geopolitical tensions

The main stock market gauges marked time this past week, hovering just around the breakeven level for the week with no data surprises, central bank musings, or other-than-usual trade and geopolitical tensions to move markets much either way on the week overall. Weakness in China’s industrial output and business investment in May gave some investors and businesses pause, as executives of more than 600 companies, including Walmart Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT), urged U.S. President Donald Trump to end escalating tariffs and reduce trade tensions with China.

Rising U.S. retail sales and industrial production in May helped support market sentiment somewhat, with the data suggesting continuing underlying economic strength and a consequently lower probability of a rate cut by the U.S. Federal Reserve. The S&P 500 Composite Index gained 0.5% on the week, while the Nasdaq Composite Index logged a 0.7% advance, despite retreating in Friday’s session on news that computer chipmaker Broadcom Inc. (NASDAQ: AVGO) cut its outlook for 2019, citing U.S. trade policy on China and sanctions against Chinese government-controlled tech giant Huawei in the U.S.

Toronto’s benchmark S&P/TSX Composite Index gained 0.4% on the week despite a decline of 2.9% in the price of crude oil. Long-standing Iranian threats to close the Strait of Hormuz in the face of U.S. sanctions seemed to be realized on Thursday, with the attack on two oil tankers in the bottleneck waterway between the Persian Gulf and the Gulf of Oman, a key transport route for oil shipments from major Mideast oil producers. Iran denied involvement in the attack, which had little impact on shipping in the region, and markets remained largely unperturbed.

Index June 14, 2019 close Day Week Year to date  
S&P/TSX Composite 16,301.91 0.4% 0.44% 13.82%  
S&P 500 Composite 2,886.98 -0.2% 0.47% 15.16%  
Nasdaq Composite 7,796.66 -0.5% 0.70% 17.50%  
Gold (US$) $1,344.90 0.1% 0.00% 5.09%  
Oil (WTI) (US$) $52.50 0.4% -2.85% 15.61%  

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


* Evolve launches gaming and materials ETFs. Evolve Funds Group Inc. announced it is launching Evolve E-Gaming Index ETF (TSX: HERO), with units expected to start trading on June 17. The fund is designed to provide investors with access to shares of companies operating in the electronic gaming industry. The fund tracks the Solactive eGaming Index, which measures the performance of equity securities of companies that are software providers for eGaming and eSports.

The company also launched its Evolve Global Materials & Mining Enhanced Yield Index ETF (TSX: BASE), which began trading on June 12. The fund invests globally in companies involved in the manufacturing, mining and/or integration of metals and materials. The fund tracks the Solactive Materials & Mining Index, while writing covered call options on up to 33% of the portfolio securities, at the discretion of the manager. The level of covered call option writing may vary based on market volatility and other factors.

* RBC iShares launches discount bond ETF. RBC iShares on June 12 launched its RBC Canadian Discount Bond ETF (NEO: RCDB). Managed by RBC Global Asset Management the ETF aims to deliver an attractive after-tax yield to maturity. The fund will purchase short-term, high-quality Canadian government and corporate bonds, with an emphasis on bonds priced below par.

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