Market week: Retail slump sinks stocks
U.S. April sales data worse than expected
A larger-than-expected drop in U.S. retail sales during April weighed on the big North American stock market indices last week. The U.S. Commerce Dept. reported a 16.4% decline, significantly larger than the consensus estimate for a 12.5% drop, as most retail stores were required to shut down in the month because of the Covid-19 pandemic. Also dragging down sentiment was a Federal Reserve Board report indicating that industrial production fell 11.2% in April, the largest decline in the 101 years that the data has been tracked.
The U.S. blue-chip S&P 500 Composite Index retreated 2.3% on the week, while the technology-weighted Nasdaq Composite Index lost 1.2%, but remained 0.5% ahead year to date, buoyed by the strong performance of the big tech stocks.
Canada fared no better, as Statistics Canada’s data for March showed an 11% slump in manufacturing sales, with April numbers expected to be even worse. Toronto’s stock gauge, the S&P/TSX Composite Index, fell 2.2% on the week. Even a 20% weekly gain in the price of crude oil, reacting in part to a drop in U.S. crude oil stockpiles, wasn’t enough to support Toronto’s market. A slide in financial issues kept the index under pressure, as the S&P/TSX Capped Financials Index lost 5.5% on the week.
FUND NEWS AND UPDATES
* Horizons consolidates shares of three ETFs. Horizons ETFs Management (Canada) announced on May 14 that it will consolidate the shares of three of its commodity-linked ETFs effective May 25.
- BetaPro Canadian Gold Miners -2x Daily Bear ETF (TSX: HGD) (1:2 ratio).
- BetaPro Natural Gas 2x Daily Bull ETF (TSX:HNU) (1:5 ratio).
- BetaPro Silver -2x Daily Bear ETF (TSX: HZD) (1:2 ratio).
* CI launches DoubleLine funds. CI Investments Inc. on May 12 debuted three new fixed-income funds sub-advised by DoubleLine Capital LP and its CEO, Jeffrey Gundlach. The three funds are offered as both mutual funds and exchange-traded funds (ETFs) in Canadian dollar (hedged and unhedged) and U.S. dollar series.
- CI DoubleLine Total Return Bond US$ Fund (ETF listed on the TSX under the symbol CDLB). The fund holds securitized investments and other fixed-income securities issued by the U.S. government or other issuers.
- CI DoubleLine Core Plus Fixed Income US$ Fund (ETF listed on the TSX under the symbol CCOR). The fund invests in a portfolio of fixed-income securities of any maturity from anywhere in the world.
- CI DoubleLine Income US$ Fund (ETF listed on the TSX under the symbol CINC). The portfolio holds a combination of securitized assets and other income-producing securities of varying characteristics, selected for their potential to provide a high level of current income, capital appreciation or both.
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