Market Watch April 6, 2018
By Andrew Trimble
Trade tensions in focus
The new month and new quarter got off to a volatile start amid rising – and falling – trade tensions and the potential regulation of U.S. technology companies.
Starting with trade, U.S. President Trump threatened new additional tariffs against China late Thursday after Beijing hit back with its own proposed duties on American goods at the start of the week. Still unclear is whether these are opening salvos to spark negotiations or the first shots in a tit-for-tat long-term trade war. Also on the trade front, there’s growing optimism a preliminary NAFTA deal may crystalize in the coming days with top negotiators for the U.S., Canada and Mexico meeting in Washington.
The U.S. technology sector also made headlines this week as the prospect of tightening regulation rose in some corners of the industry due to privacy breaches. Despite the fretting, many market participants remain bullish about equities pointing to a synchronized rebound among developed countries, a sound U.S. economy and solid corporate earnings around the globe. With regard to the upcoming U.S. earnings season, S&P 500 companies are expected to grow earnings 17% in the first quarter 2018 from a year earlier according to Factset.
In U.S. economic news, factory activity remained robust in March despite falling from February’s level. The ISM’s manufacturing index fell to 59.3 last month versus 60.8 the prior month with reads above 50 pointing to expansion. The ISM’s gauge of service activity – released two days after the manufacturing print – also pointed to expansion despite falling from February’s read. In the euro zone, the inflation rate rose to 1.4% in March while a separate release showed unemployment falling to 8.5%, a nine-year low.
Looking ahead, Canada and the U.S. release employment data today with most eyes on the U.S. numbers to see if they may impact the Fed’s course on rate rises.
Traders returning from the Easter holiday were greeted with a bumpy week filled with ups and downs through Thursday close. For the four days covered in this report, the Dow rose 402 pts. to close at 24,505, the S&P 500 added 22 pts. to end at 2,662 and the Nasdaq moved ahead 13 pts. to settle at 7,076. The TSX ended down 11 pts. to finish at 15,356.
This publication has been prepared by ScotiaMcLeod, a division of Scotia Capital Inc. (SCI). This publication is intended as a general source of information and should not be considered as personal investment or tax advice. We are not tax advisors and we recommend that individuals consult with their professional tax advisor before taking any action based upon the information found in this publication. Opinions, estimates, and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither SCI nor its affiliates accepts liability whatsoever for any loss arising from any use of this publication or its contents. This publication is not, and is not to be construed as, an offer to sell or solicitation of an offer to buy any securities and/or commodity futures contracts. SCI, its affiliates and/or their respective officers, directors, or employees may from time to time acquire, hold, or sell securities and/or commodities and/or commodity futures contracts mentioned herein as principal or agent. SCI and/or its affiliates may have acted as financial advisor and/or underwriter for certain of the corporations mentioned herein and may have received and may receive remuneration for same. All insurance products are sold through Scotia Wealth Insurance Services Inc., the insurance subsidiary of Scotia Capital Inc., a member of the Scotiabank Group. When discussing life insurance products, ScotiaMcLeod advisors are acting as Insurance Advisors (Financial Security Advisors in Quebec) representing Scotia Wealth Insurance Services Inc. This publication and all the information, opinions, and conclusions contained in it are protected by copyright. This report may not be reproduced in whole or in part, or referred to in any manner whatsoever, nor may the information, opinions, and conclusions contained in it be referred to without in each case the prior express consent of SCI.
“Battle of the Badges” raises $35,000 for Humboldt Broncos
Friday’s “Battle of the Badges” charity hockey game in Red Deer was a huge success. The game...
READ MORE +
Red Deer County cancels Overland Flood Alert, road closures still in effect
Red Deer County has cancelled the overland flood alert and high water level alert that were in...
READ MORE +
'I'm flying you guys to school:' Small plane touches down on Calgary street
CALGARY — Jamal Hammoud woke up about 5:45 a.m. on Wednesday to get a drink of water when he...
READ MORE +
Join the Discussion
We are happy to provide a forum for commenting and discussion. Please respect and abide by the house rules: Keep it clean, keep it civil, keep it truthful, stay on topic, be responsible, share your knowledge, and please suggest removal of comments that violate these standards. See full commenting rules.