Market week: U.S. Fed’s outlook lifts stocks

Market week: U.S. Fed’s outlook lifts stocks

Canadian market on hold

Investors drove U.S. stocks into record high territory this past week, as markets cheered Federal Reserve Board Chairman Jerome Powell’s dovish stance on interest rates during regular testimony before congress. A rate cut by the Federal Open Market Committee on July 30-31 is already heavily discounted by the market, and Powell’s testimony seemed to lock it in. The S&P 500 Composite Index gained 0.8% on the week, as the index posted a all-time high close of 3,013.77 on Friday. Despite a US$5 billion fine levied on Facebook Inc. (NASDAQ: FB) by the U.S. Federal Trade Commission, shares of the social media giant rose on the week, helping propel the Nasdaq Composite Index to a 1% gain on the week overall.

In Canada, meanwhile, the Bank of Canada left its target overnight rate unchanged at 1.75%, against a backdrop of strong domestic demand, but with trade tensions weighing on business investment over the next two years. The S&P/TSX Composite Index finished an uneventful week with a hairline loss of 0.3% overall, as investors followed suit with the BoC’s wait-and-see attitude.

Index July 11, 2019 close Day Week Year to date  
S&P/TSX Composite      16,488.12 -0.2% -0.33% 15.12%  
S&P 500 Composite        3,013.77 0.5% 0.78% 20.22%  
Nasdaq Composite        8,244.14 0.6% 1.01% 24.25%  
Gold (US$)      $1,417.40 0.8% 1.24% 10.76%  
Oil (WTI) (US$)           $57.51 0.3% -0.26% 26.65%  

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


* Franklin Templeton launches two active bond ETFs. Jumping on the clone ETF creation bandwagon, Franklin Templeton Canada on July 8 debuted two active fixed-income ETFs, which will invest directly in Series O units of corresponding Franklin Bissett mutual funds.

Franklin Liberty Core Plus Bond ETF (TSX: FLCP) invests only in Franklin Bissett Core Plus Bond Fund. Franklin Liberty Short Duration Bond ETF (FLSD) invests in Franklin Bissett Short Duration Bond Fund.

* RBC opens – then closes – high yield fund. RBC Global Asset Management Inc. briefly opened its PH&N High Yield Bond Fund on June 27, announcing a limited amount of extra capacity. In what must be one of the shortest windows on record, the fund was closed again on July 10. If you missed it, you missed it. Existing unitholders can still make investments.

* First Asset terminates U.S. ETF. First Asset Investment Management Inc. announced on June 28 that it will terminate the CI First Asset U.S. Tactical Sector Allocation Index ETF (TSX: FUT) effective Sept. 13. The fund, with only $7 million in assets, will be delisted from the TSX on Sept. 12, and units will continue to be listed until then.

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