Market Report

Mid-March 2019 Issue | Released Bi-weekly.

Authors: Director of Investments, Shenning Wang

Senior Investment Associate, Faseeha Behzad
Investment Associate, Hamza Razaq
Investment Associate, Pearson Li
Investment Associate, Marcus Wiltsie

Editors: Aman Regmi

March 18th, 2019


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Canadian Markets

The S&P TSX saw little change over the past two
weeks as the index saw a slight increase of
0.37% from 16,080 to its eventual 16,140. After
an initial slip and then recovery, the index
worked its way back to hit a 5-month high on
Friday March 15th. The initial decrease was due
to in large part to a decrease in the Energy
Sector which had a noticeable effect on the
index. This initial slip was later reversed as the
price of Oil improved throughout the week and
the Healthcare Industry showed significant
S&P TSX strength.
The S&P TSX Venture also saw a negligible
change over the past two weeks as the index
initially fell and then revered to show a gain of
0.32% from its open of 625 to its eventual
resting point of 627. Reasons for the movement
of the index are mostly the same as the TSX. Of
the sub groups that make up the TSX Venture, it
was pulled down by the energy sector but later
propped up by the solid performance of the
Health care and Financial sectors. A company
that had a particularly strong performance over
the past week was Aurora Cannabis INC (TSX:
ACB) who increased by a 36.71% from 9.39 to
S&P TSX Venture
12.81 over the past two weeks. 


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U.S. Markets

In the U.S. markets, the S&P 500 index saw a
small increase of 0.28% over the past two
weeks. The S&P fell from its starting point of
2,814 to a low of 2,722 on the 8th of March,
but then recovered to finish at 2822 by the end
of the day on March 15th.

The Dow Jones declined by 0.98% over the past

two weeks owing in large part to a faltering
S&P 500 Energy Sector that was the main driving force
for the downward slide. The aircraft
manufacturer Boeing made news as its entire
fleet of 737’s was grounded following
developments in a crash investigation of a 737
operated by Ethiopian Airlines. Its stock topped
the losers as it slid down 6% to close out the
week.

The tech-heavy NASDAQ offered a ray of hope,

as it saw a noticeable increase of 1.47% over
the past two weeks. This boost saw the index
rise from 7,199 to 7,306 over the two weeks as
large tech giants such as Alphabet (GOOGL) and
DJIA
Microsoft (MSFT) saw gains of 3.92% and
2.95% respectively. Across the board, the tech
industry performed well or saw little change.


NASDAQ

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Currencies
USD/CAD EUR/USD

USD/JPY GBP/USD

The increase in USD/CAD was 0.57%, which is a range from 1.32488 – 1.33238. There were certain
spikes during the month such as the 1.3330 spike that happened due to change in oil prices and
further stability with Bank of Canada not increasing interest rates.
The growth in EUR/USD is 0.39%, from mid-February to beginning of March there was a bit of
anticipation in regards to policy changes happening in the European Union that allowed for some
positive growth for the exchange rate, coming back to a 1.37% increase just over the last week.
Looking at the USD/JPY has averaged a growth of 0.98%. The overall bullish movement of this
exchange has been present due to artificial catalysts that have been added within this past month.
The main two that had allowed the exchange rate to go from 110.470 – 111.956 within the range of
two weeks was the announcement of Bank of Japan’s decision in the change in rates.
The GBP/USD moved higher by an average of 3.08%. Overall, the movement of this exchange was
motivated by politics. For example, the Federal Reserve in the United States had decided to step
away from monitoring monetary policy which means if the European Union gives Brexit deadline an
extension, the result of this should serve as a catalyst for this. Politically orientated events like this
have been the cause and effect for the volatile movement of this exchange rate.


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Commodities
Natural Gas Crude Oil

Gold Palladium

Natural Gas closed at $2.783, a slight drop of 1.10% over the last two weeks. The natural gas price is
still on the downward trend since last November. After the extremely cold period from February 27th
to March 8th, the supply of natural gas began to increase in both North Bay area and Pennsylvania,
which drove up the natural gas price.
Crude Oil closed at $58.36 which translated to a gain of 7.79%. The political crisis in Venezuela
continued to create uncertainty in Crude Oil market although its production has stabilized at around
1.2 mb/d. A continued uncertainty about Brexit also suggested a trend of declining oil production.
Gold closed at $1299.6, up by 1.1%, a steep rise supported by the weakening of the dollar. The new
monetary policy decided by Bank of Japan suggested a dovish stance due to its concern about
European and Chinese economic slowdown. The concern about potential global economic slowdown
drove the gold price up.
Corn closed at $3.654 which was consistent with performance two weeks ago. The Sino-U.S. trade
negotiation and use of ethanol are the major factors of the price movement. China’s state grain buyer
announced to purchase more corn on March 1st which drove the price up by 2.68% in one day. On
March 12th the Texas corn crop was 11 percent planted compared to last year's pace at this time of
24 percent, which initiated the price recovery. 


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Economic Updates
Date Country Event Actual Forecast Previous

07-03-19 Eurozone Employment Change YoY 1.3% 1.2% 1.4%

07-03-19 China Exports YoY -20.7% -4.8% 9.3%

31-03-19 Eurozone GDP Growth YoY 1.1% 1.2% 1.6%

12-03-19 United States Inflation Rate YoY 1.5% 1.6% 1.6%

Parliamentary Vote on No-Deal

13-03-19 GB Rejected - -
Brexit

14-03-19 China Housing Price Index YoY 10.4% 10.5% 10%

In Europe, while there has been some labour mobility, it has not been sufficient to prevent high
unemployment in some places. Some European governments, such as Italy, have had to contend with
weak banks, thereby hurting their own finances. Such banks continue to contribute to weak credit
creation. Chinese government reported that exports fell 20.7 percent in January versus a year earlier,
a clear indication of the toll that the trade war is taking. Moreover, equity prices fell sharply in
response to the trade figures. Equity prices in other Asian countries fell as well. The US government
published its first estimate of economic growth in the fourth quarter of 2018. The report indicated
that the economy grew at a modest yet healthy pace in the fourth quarter. The Canadian economy
stalled, creating a weak handoff going into 2019 and confirming the notion that a significant
economic slowdown is underway.

Economic Calendar
Date Country Event Forecast Previous

17-03-19 Japan Exports (YoY) -0.9% -8.4%

18-03-19 Australia Home Price Index -2% -1.5%

19-03-19 United Kingdom Average Earnings 3.2% 3.4%

21-03-19 United Kingdom Retail Sales (YoY) 3.3% 4.2%

22-03-19 Canada CPI Inflation (YoY) 1.5% 1.4%

22-03-19 United States Existing Home Sales % Change 2.2% -1.2%

Earnings Calendar
Date Company Name Symbol Earnings Release time EPS estimate

19-03-19 DSW Inc. NYSE: DSW Before market open $0.05

19-03-19 Fedex Corp. NYSE: FDX After market close $2.85

20-03-19 General Mills Inc. NYSE: GIS Before market open $0.67

Micron Technology
20-03-19 NYSE: MU After market close $1.64
Inc.

21-03-19 Nike Inc. NYSE: NKE After market close $0.67

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Disclaimer: all information present in this report is for educational and informational purpose only and without warranty of any kind. All
information present in this report represents only the opinion of the writers, which may be influenced by various factors. You are advised to
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