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The yield on the 10-year U.S. Treasury note rose to 3.22% on Friday, continuing a bond selloff, as investors reacted to an ultra-low 3.7% unemployment rate and an annual 2.8% hourly wage gain, both indicators signaling continuing strength in the underlying U.S. economy, solidifying expectations of another rate hike by the U.S. Federal Reserve Board before year-end. Lower-than-expected job creation of 134,000 new payrolls in September was attributed to temporary labour market distortions in the wake of Hurricane Florence. North of the border, Statistics Canada’s monthly Labour Force Survey showed a gain of 63,000 jobs in September, continuing a recent volatile trend in monthly jobs data. Average hourly wage growth edged down to 2.2% in the month from 2.6% in August, while the unemployment rate ticked down to 5.9% from 6.0%. With investors selling equities in lockstep with U.S. markets, Toronto’s S&P/TSX Composite Index consequently posted a 0.8% decline on the week, despite a 1.2% gain in the price of WTI crude oil and a 1.0% uptick in the price of gold. The big blue-chip S&P 500 Composite Index retreated 1.0%. The Nasdaq Composite Index lost the most ground on the week, dropping 3.2%, driven mainly by losses in high-growth technology and Internet issues.
FUND NEWS
* Hamilton Capital launches bank ETF. Hamilton Capital Partners Inc. this past week debuted its Hamilton Capital Canadian Bank Dynamic-Weight ETF (TSX: HCB), investing in Canadian banks and using a rules-based “mean reversion” portfolio rebalancing methodology in an effort to improve the return potential. As for portfolio strategy, Hamilton stated in a release, “HCB will seek to achieve its investment objective by applying a dynamic re-weighting strategy to a portfolio of the six largest Canadian banks. Each month, the portfolio will overweight the three most oversold banks from the prior month and underweight the three most overbought.”
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