The American political drama dominated the first week of 2021. The surprise overriding of the US Capitol Building by protesters this week has shaken the capital market. Instead, investors focused on the prospect of greater economic stimulus in the wake of Democrats winning both Senate runoff elections in Georgia, and the possibility that political peace would now prevail, as the election of Joe Biden attests . All major North American equity indices marked the first time since last February that Canada’s S&P / TSX Composite Index (Nasdaq Composite Index wiped out all of its COVID-19 losses seven months ago and the S&P 500 over four months Done) including climbed to record highs. first.)
Positive sentiment boosted long-term government bonds in both Canada and the US. US 10-year Treasury bond yields rose above 1% for the first time since last March. A weaker US dollar provided a lift to commodity prices, including oil and copper. West Texas Intermediate crude jumped above US $ 50 a barrel for the first time since February, helped by a surprise production cut by Saudi Arabia that led to a new production agreement with Russia and other members of the Organization of Petroleum Exporting Countries (OPEC) Happened.
Within the equity markets, late-2020 value and small-capitalization stocks were renewed. Price indices led the market to rise, while growth indices lagged behind. The outflow of the small cap, which is likely to have a more robust profit recovery than its larger cap peers, was particularly strong. Canada’s S&P / TSX Small Cap Index jumped 5% compared to 3.2% for the Large Cap S&P / TSX 60 Index. In the US, the S&P 600 Small Cap and Russell 2000 indices increased by 7% and 6%, respectively, while the large cap is less than 2% for the S&P 100. Canada’s S & P / TSX small cap index climbed 3.8% compared to 3.5%. S&P / TSX Composite Index.
Rising shares of cannabis companies made health care the strongest sector of the TSX, as democratic control of the US Senate would make it easier to pass a number of legislative resolutions, including the campaign’s resolution to reduce marijuana. However, most of the load in Canada’s benchmark came from the energy sector, which was affected by rising oil prices. Energy and materials were the best performing sectors in the S&P 500. The financial sector also outperformed due to rising yields and stopper yield curves, leading to improved bank profitability. US economic data was mixed, with both manufacturing and services managers’ indices (PMI) rising unexpectedly, while the jobs report showed a sharp slowdown in hiring. However, weak payroll data served to increase anticipation of further stimulation.
All major European and Asian stock markets carried a wave of US stimulus optimism to a higher level. Most European markets outpaced the US equity indices when data showed that euro-area manufacturing grew at the fastest rate in two-and-a-half years in December. Stocks in London were particularly strong, despite a third lockdown in England as UK manufacturing PMI reached a three-and-a-half year high, and the recent uncertainty-lifting Brexit agreement boosted investor confidence.
This weeks market closing values
|S&P/TSX||18,042.07||+ 608.71||+ 3.49%||+ 3.49%||+ 5.09%||+ 7.71%|
|S&P 500||3,824.68||+ 68.61||+ 1.35%||+ 1.35%||+ 14.68%||+ 12.37%|
|DJIA||31,097.97||+ 491.49||+ 1.13%||+ 1.13%||+ 5.53%||+ 11.37%|
|FTSE 100||6,873.26||+ 412.74||+ 5.34%||+ 5.34%||– 8.28%||– 0.42%|
|CAC 40||5,706.88||+ 155.47||+ 2.35%||+ 2.35%||+ 1.53%||+ 5.90%|
|DAX||14,049.53||+ 330.75||+ 1.44%||+ 1.44%||+ 13.17%||+ 7.60%|
|Nikkei||28,139.03||+ 694.86||+ 1.33%||+ 1.33%||+ 24.10%||+ 10.15%|
|Hang Seng||27,878.22||+ 647.09||+ 1.88%||+ 1.88%||– 2.93%||+ 4.20%|
|US$||1.2695||– 0.0033||– 0.26%||– 0.24%||– 2.64%||– 2.18%|
|Euro||1.5518||– 0.0028||– 0.18%||– 0.17%||+ 7.17%||+ 0.07%|
|Yen||0.0122||– 0.0001||– 0.96%||– 0.92%||+ 2.21%||+ 0.20%|
|3-month||0.06||+ 0.00||Oil||$52.60||+ $4.08|
|5-year||0.45||+ 0.05||Gold||$1,847.49||– $51.18|
|10-year||0.82||+ 0.14||Natural Gas||$2.71||+ $0.33|
What’s ahead next weeks:
- Bank of Canada Business Outlook Survey (4th Quarter)
- Existing home sales (December)
- Consumer and Producer Price Indices (December)
- Import and Export Price Indices (December)
- Empire State Manufacturing Survey (January)
- Retail sales (December)
- Industrial production (December)
- Capacity utilization (December)
- Univ. of Michigan Consumer Sentiment Index (January)