Market week: Stock indexes lose ground in scary month

Sentiment dampened by pandemic, U.S. election

The major North American stock indexes posted their worst weekly losses since March this past week, despite record earnings and revenues from the big four tech giants, Apple Inc., Facebook Inc., Amazon.com Inc., and Alphabet Inc. Although the U.S. posted 33% GDP growth in the third quarter, investor sentiment was dampened by the potential for some slowdown in the fourth quarter owing to Covid-19 related lockdowns.

Investors contended with anxiety over the second-wave surge in Covid-19 cases in both the U.S. and Canada, as well as uncertainty about the outcome of the U.S. presidential election on Nov. 3. In addition, anxieties remain about whether Congress will come to an agreement on further fiscal stimulus after the election.

Heightened volatility marked index performance through all of October, as losses over the past week kept indexes underwater for the month. Toronto’s S&P/TSX Composite Index lost 4.4% for the week and was down 3.4% for the month overall. The S&P 500 Composite Index retreated 5.6% on the week but gained a marginal 1.2% for the month. And the tech-heavy Nasdaq Composite Index lost 5.5% on the week and was down 2.3% in October.

Fund news and updates

* Dynamic launches renewable energy fund. Dynamic Funds on Oct. 29 debuted its Dynamic Energy Evolution Fund, an environmentally-focused fund that aims for long-term capital appreciation and income through a diversified portfolio of companies involved in renewable energy or related activities from around the globe. The fund is managed by Jennifer Stevenson, Frank Latshaw, and Oscar Belaiche.

* Fidelity introduces new liquid alt funds. Fidelity Investments Canada on Oct. 20 launched three new liquid alternative mutual funds:

Fidelity Global Value Long/Short Fund, managed by Dan Dupont, invests in long and short positions of stocks anywhere in the world. The fund may use leverage through the use of short selling of up to 50% of its net asset value and by investing in derivatives.

Fidelity Market Neutral Alternative Fund, managed by Brett Dley, invests in long and short positions of Canadian and/or U.S. stocks. The fund may use leverage through the use of short selling of up to 100% of its net asset value and by investing in derivatives.

Fidelity Long/Short Alternative Fund, managed by David Way, invests in long and short positions of Canadian and/or U.S stocks and may use leverage through the use of short selling, generally around 30% of its net asset value but may short sell up to 50% of its net asset value, and by investing in derivatives.

Monitor the main stock and commodity indices 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.