IAIC Market Update - February 1, 2021
Last Week in the Markets: January 25th - 29th, 2021
(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)
What happened last week?
- It was a mixed week for economic data releases and news in-general causing most equity markets to fall.
- The manufacture, delivery and administration of the vaccine has slowed. The completion of a new U.S. stimulus bill to combat the virus at the consumer and household level has been delayed by political machinations. U.S. Gross Domestic Product (GDP) for the fourth quarter and durable goods orders fell short of expectations.
- Canadian GDP was better than expected for November, which could suggest that firms are adapting reasonably well to the operating conditions they have been facing for nearly one year.
- Further, shares prices for names such as GameStop and AMC were extremely volatile. Fear has increased that trader activity, not company performance, could drive valuation in equity markets at least in the short term. Several hedge funds needed to sell stock, or take on additional capital, to cover their short market positions. To prevent similar activity in the future, fund managers have vowed to make changes. (Source)
- On Wednesday, the U.S. Federal Reserve made its interest rate decision. Like the Bank of Canada “the Fed” has indicated that it will hold the benchmark lending rate steady until inflation rises to an average of 2%, which will prove that economic expansion has occurred in a sustainable manner. Jerome Powell, Federal Reserve Chair, announced that the Federal Funds rate would remain unchanged and stay in the range between 0 and ¼ percent. (Source)
What’s ahead for this week?
- In Canada, the January employment numbers, December trade deficit data and purchasing managers index are scheduled for release.
- In the U.S., purchasing managers indices for products and services are scheduled along with the trade deficit report. January’s jobs numbers for non-farm payroll will provide additional guidance for a stimulus bill as the negotiations continue between Republicans and Democrats.
The latest details from the Canadian Federal Government on stimulus and economic assistance are available here.
The latest details of the current Canada’s Covid-19 Economic Response Plan are available
here.
For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca
This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc. All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics. No guarantee of outcome is implied and opinions may change without notice. Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein. Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.
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