Market Watch – August 24, 2018

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In Venezuela, economic signs are growing more dire each day. Under President Nicolas Maduro, Venezuela’s economy has shrunk more than 50%, and inflation is projected to reach 1 million percent. Maduro’s latest measures are almost guaranteed to exacerbate the crisis: a 6,000% increase in the minimum wage, and an almost 100% devaluation in the exchange rate.

Mourning the loss

Hope Mission reports overdose death outside temporary emergency homeless shelter

8h ago

Last seen on April 6

Missing: Diane Cooper, 82, of Consort

8h ago

6 to 8 p.m.

MLA Jason Stephan to hold public town hall on Thursday

9h ago

Markets

Stocks End Lower Thursday as Trade Concerns Linger

For the four days covered in this report, the Dow surrendered 12 points to close at 25,657, the S&P 500 added 7 points to end at 2,857 while the tech-heavy Nasdaq added 63 points to settle at 7,879. In Canada, the TSX was relatively flat, adding 3 points over the period to close at 16,327.

Equities/Strategy

Investment Strategy

We continue to recommend overweight exposure to equities and underweight exposure to fixed income, relative to our long-term strategic asset allocation model. Recent volatility in global financial markets underscores the importance of portfolio diversification. Geopolitical risk weighed on market sentiment in recent weeks. The Turkish lira crisis spread to other parts of the world, pressuring the euro and emerging market (EM) currencies such as the South African rand, Argentine peso and Brazilian real. Although other EM countries’ trade exposure to Turkey is relatively small, U.S. dollar (USD) strength has been a major concern. Many EM countries rely on foreign capital and have accumulated high levels of USD-denominated debt and expanded their current account deficits in recent years. Credit risks are also mounting, evidenced by widening EM corporate bond spreads. The recent spike in financial market volatility serves as a reminder that investors should manage risk by diversifying their portfolios across traditional asset classes, such as equities and fixed income, and alternative investments.

(Big Picture – By Bill Curry)

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