Market Watch – Sept. 14, 2018

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Meanwhile, the U.S. trade deficit posted its biggest monthly increase in almost three and a half years in July, as a booming domestic economy raised imports while exports were restrained by trade conflicts and slowing global growth. One factor behind the July gap: U.S. exports of soybeans fell dramatically due to China’s retaliatory tariffs against the U.S.

Ongoing bridge construction

Portion of Gaetz Avenue to be closed for four weeks beginning this Sunday

4h ago

2026-27 fiscal year

RDP suspends intake into three programs amidst budget planning

4h ago

Employment boost

Care for Newcomers launches newcomer employment initiative

8h ago

Finally, oil prices fell Wednesday – after spiking Tuesday – as tropical storm Gordon failed to develop into a major problem for U.S. Gulf Coast refineries.

Markets

Tech Sector Weighs on Nasdaq, S&P

The U.S. tech sector dragged down the Nasdaq and S&P on Wednesday and Thursday, while lingering NAFTA worries weighed on the TSX. For the three days covered in this report, the Dow climbed 31 points to close at 25,996, the S&P 500 shed 24 points to end at 2,878 while the tech-heavy Nasdaq dropped 187 points to settle at 7,923. In Canada, the TSX declined 162 points to close at 16,101.

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. In light of potential volatility at this late stage of the business cycle, we also stress the importance of portfolio diversification. U.S.-China and U.S.-Canada trade tensions have weighed on market sentiment in recent weeks. At the same time, a strengthening U.S. dollar (USD) has pressured commodities and emerging market assets. The USD has rallied more than 7% since early February of this year, and our technical analysis suggests further appreciation is possible. However, we would not be surprised to see short-term pullbacks in the greenback, consistent with investors periodically taking profits on long USD positions. As mentioned previously, financial market volatility could re-emerge, prompted by geopolitical, currency and credit risks, among others. Accordingly, we continue to recommend that investors actively manage their risk exposures, in part by diversifying their portfolios across traditional and alternative asset classes.

(Big Picture — By Bill Curry)

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