Market week: Stocks slump as volatility, bearish mood prevail
Nasdaq Composite sinks to correction level
As volatility continues to grip stock markets, the major stock indexes posted weekly declines, led by the technology sector, where Netflix Inc. plunged 20% on analysts’ projections of a major decline in new subscribers for the streaming giant in the first quarter. In addition, the U.S. Federal Reserve appears poised to begin raising interest rates as early as March in an effort to stanch persistently rising inflation. And tightening geopolitical tensions, as Russia threatens to invade Ukraine, have added to investor anxieties. The rush from equities to safe-haven assets has pushed down the yield on the bellwether U.S. 10-year Treasury notes to 1.75%, the lowest in five weeks. Cryptocurrency Bitcoin, meanwhile, fell to below US$38,000 on Friday, its lowest level in over five months after Russia proposed banning cryptocurrencies in the country.
The collapse in technology shares pulled the rug out from under the Nasdaq Composite Index, which plunged 7.6% on the week and is now down more than 10% from its November high, a decline usually regarded as a correction by market analysts. The S&P 500 Composite Index closed out the week down 5.7% from last week’s close. And Toronto’s benchmark S&P/TSX Composite Index fell 3.5% in lockstep with the U.S. indexes, as Canada’s inflation rate hit 4.8% in December. Crude oil and gold remained essentially flat on the week, gaining about 1.0%.
* Fundata A+ Awards for 2021 to be announced on Jan. 26. Financial data provider Fundata Canada will announce the winners of the 2021 A+ Awards on Jan. 26. The Award is given annually to investment funds and managers who have shown consistent, outstanding, risk-adjusted performance incorporating up to 10 years of history. Winners will be posted on the Fundata A+ Awards website on Jan. 26.
* iA Clarington debuts three new funds of funds. IA Clarington Investments on Jan.20 launched three new portfolio solutions:
IA Clarington Global Risk-Managed Income Portfolio, managed by iA Investment Management Inc., targets a monthly distribution of 5% for Series F and 4% for Series A (annualized). The fund invests in high-yield bonds, senior loans, and other non-traditional asset classes. A target 40%-60% equity allocation helps ensure the longevity of retirement assets in an environment of rising inflation and longer lifespans. An options overlay that aims to reduce equity volatility. The fund is co-managed by iA’s team of Tej Rai and Sébastien Mc Mahon.
IA Clarington Inhance Conservative SRI Portfolio (25% equity/75% fixed income) and IA Clarington Inhance High Growth SRI Portfolio (80% equity/20% fixed income) are manged by Vancity Investment Management Ltd. and iA. Top-down asset allocation will directed by iA’s Tej Rai and Sébastien Mc Mahon
* Invesco adds to ESG ETF lineup. Invesco Canada on Jan. 20 introduced eight new exchanged-traded funds (ETFs) that that focus on environmental, social and governance (ESG) criteria.
- Invesco S&P US Total Market ESG Index ETF (TSX: IUCE) tracks the S&P Composite 1500 ESG Index (CAD).
- Invesco S&P US Total Market ESG Tilt Index ETF (TSX: IUTE) tracks the S&P Composite 1500 ESG Tilted Index (CAD).
- Invesco S&P/TSX 60 ESG Tilt Index ETF (TSX: IXTE) tracks the S&P/TSX 60 ESG Index (CAD).
- Invesco S&P/TSX Composite ESG Tilt Index ETF (TSX: ICTE) tracks the S&P/TSX Composite ESG Tilted Index (CAD).
- Invesco S&P 500 ESG Tilt Index ETF (TSX: ISTE) tracks the S&P 500 ESG Tilted Index (CAD).
- Invesco S&P International Developed ESG Index ETF (TSX: IICE) tracks the &P Developed Ex-North America & Korea LargeMidCap ESG Index (CAD).
- Invesco S&P International Developed ESG Tilt Index ETF (TSX: IITE) tracks the S&P Developed Ex-North America & Korea LargeMidCap ESG Tilted Index (CAD hedged).
- Invesco ESG Global Bond ETF (TSX: IWBE) applies the same ESG screening methodology as the Invesco ESG Canadian Core Plus Bond ETF (BESG). Both aim for interest income and growth potential through ESG fixed-income allocations.
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