By ScotiaWealth - The Zukiwsky Group (Sponsored)

Market Watch – Sept. 21, 2018

Sep 21, 2018 | 11:15 AM

Dow, S&P 500 Hit Record Highs; TSX Buoyed by Cannabis Producers

In the U.S., the Dow and S&P 500 hit new closing records Thursday, as expectations for another surge in corporate profits helped investors brush off the latest developments in the ongoing trade war between the U.S. and China. The major indexes headed higher despite a recent jump in bond yields, a sign that equity investors are less worried over the Fed’s pace of rate hikes. Investors are looking to next week’s Fed meeting, with most expecting the U.S. central bank to raise rates. Meanwhile, the U.S. economy continued to show signs of strength, with unemployment at its lowest level in nearly two decades and economic output growing at the fastest rate in four years. The employment outlook got even better Thursday as initial jobless claims fell to a seasonally adjusted level of 201,000 last week — the lowest level since November 1969.

In Canada, the TSX continued its climb in afternoon trading on Thursday, lifted by the financial sector and shares of cannabis producers, which have been a key focus for many investors this week. Canada’s main index has been trending up, despite an ongoing stalemate between Canada and the U.S. as they try to hammer out a revised NAFTA agreement. In currency-related news, the loonie strengthened to its highest level in more than three weeks against the U.S. dollar on Thursday as the greenback continued to weaken. There was more good news this week on Canada’s economic front as Canadian factory sales grew by a surprising 0.9% in July, pushed higher by gains in the transportation equipment and chemicals industries.

Markets
Markets Up as Investors Shrug Off Trade Concerns

For the four days covered in this report, the Dow climbed 502 points to close at a record-high 26,657, the S&P 500 added 26 points for a record close of 2,931, while the tech-heavy Nasdaq climbed 18 points to settle at 8,028. In Canada, the TSX soared 201 points to close at 16,215.

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2026-27 fiscal year

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Employment boost

Care for Newcomers launches newcomer employment initiative

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Equities/Strategy
Strategy

We continue to recommend overweight exposure to equities and underweight exposure to fixed income, relative to our long-term strategic asset allocation model. Global macro-related headlines underscore the importance of prudent portfolio diversification. New developments in U.S.-China trade relations and Brexit and NAFTA negotiations have been met with muted reactions in global financial markets. North American equities continue to grind higher as they approach important long-term technical levels, and economic data have been broadly supportive of the global growth narrative. The U.S. dollar index has pulled back modestly over the past month, reducing stress on emerging markets and driving global equity market gains. However, given the potential for greater levels of volatility at this late stage of the business cycle and fluid geopolitical conditions, we continue to recommend that investors manage risk through diversification across asset classes and geographic regions while maintaining overweight equity exposure.

(Big Picture – Bill Curry)

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by ScotiaWealth - The Zukiwsky Group (Sponsored)

Market Watch – Sept. 21, 2018

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