Market week: U.S. indexes close at record highs

10-29-2021
Market week: U.S. indexes close at record highs

S&P/TSX loses ground as BoC ends QE

 

The major U.S. market indexes posted record high closes on Friday, as U.S. Treasury bond yields took a breather from their steady climb and slipped a notch on Friday. The yield on the bellwether 10-year U.S. Treasury slipped to 1.56% from an earlier 1.63%, as markets priced in cooling economic demand and persistent inflation, along with a growing probability that the U.S. Federal Reserve Board will taper its quantitative easing program as early as next week, as a prelude to a rate hike in the first half of next year to counter a persistent inflationary trend that has turned out to be not so “transitory” after all.

The blue-chip S&P 500 Composite Index finished Friday at a record high close of 4,605.38, for a 1.3% gain on the week, and a respectable 5.5% advance for the month of October, against a backdrop of stronger than expected quarterly earnings results, with about 82% of companies reporting so far (about half the S&P 500) posting estimate-beating results.

The technology-weighted Nasdaq Composite Index defied lower-than-expected quarterly sales by Apple Inc. and weaker than forecast earnings from Amazon.com Inc. to post a weekly gain of 2.7%, propelling the index to at 4.4% advance for the month.

In Canada, the Bank of Canada abruptly announced the end of its quantitative easing program this past week, shifting its window for a potential rate hike to the second and third quarters of next year. The S&P/TSX Composite Index lost 0.8% on the week, with weakness in most sectors, but heavy losses in health care (-4.4%), consumer staples (-2.5%), consumer discretionary (-2.4%), and materials sectors (-2.4%). Crude oil paused somewhat in its relentless climb, slipping back 0.9% on the week, but still ahead 12.0% for the month for a year to date gain of 71.5%. Gold retreated 0.5% on the week, but still managed to eke out a 2.1% advance for the month.

Fund news

* iA Financial debuts four global segregated funds. iA Financial Group on Oct. 25 added four new global segregated funds to its lineup.

The iA Fixed Income Managed Portfolio. Led by Alexandre Morin of iA Investment Management, this all-in-one solution applies a multi-manager strategy that combines core and non-traditional bond mandates for additional return potential.

The iA Global Multisector Bond (Loomis Sayles). Managed by Matthew Eagan, Brian Kennedy, and Elaine Stokes, this fund applies a flexible multi-sector approach. It is offered by iA Financial Group exclusively as a segregated fund in Canada.

The iA Fidelity Global Innovators specialty equity fund. Managed by Mark Schmehl, award-winning portfolio manager several times over, this fund, managed in a thematic and high-growth style, targets companies that are particularly innovative in today's rapidly evolving context and provides high return potential.

The iA Fidelity Multi-Asset Innovation diversified fund. Under the direction of Mark Schmehl, Jeff Moore, and Michael Plage, this fund is the combination of two distinct strategies (60% Fidelity Global Innovators/40% Fidelity Multi-Sector Bond Currency Neutral) that are likely to generate solid returns adjusted to risk, regardless of the market cycle.

* Horizons expands into vaccines and infrastructure ETFs. Horizons ETFs Management on Oct. 27 launched two new ETFs, which began trading on Oct. 27:

Horizons Global Vaccines Infectious Diseases Index ETF (TSX: HVAX) tracks the Solactive Global Vaccines and Infectious Diseases Index of global, publicly listed companies developing and producing vaccines, therapeutics, and diagnostics. U.S. dollar portfolio exposure is hedged back to the Canadian dollar at all times.

Horizons North American Infrastructure Development Index ETF (TSX: BLDR) tracks the Solactive North American Infrastructure Development Index of North American companies in the building materials and equipment, logistics, construction, and engineering services used for the development and maintenance of infrastructure projects. U.S. dollar portfolio exposure is hedged back to the Canadian dollar at all times.

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