By Scotia Wealth Management - The Zukiwsky Group

sponsored

MARKET WATCH: Oct. 18

Oct 18, 2019 | 11:24 AM

Big Picture

EU and U.K. Reach Preliminary Brexit Deal; Hopes Fade for U.S.-China Trade Truce

Global markets got off to a strong start Thursday after the European Union and U.K. reached a preliminary Brexit deal. British Prime Minister Boris Johnson and the EU’s leaders must now approve the text in Brussels on Thursday and Friday. If approved, the deal would then go to Britain’s Parliament, where final acceptance is far from certain. While the pound and euro initially surged on news of the deal, optimism faded a bit as markets weighed the likelihood of approval by U.K. lawmakers.

It’s been a fairly subdued week thus far for North American markets. After Monday’s holiday in Canada, the TSX was flat on Tuesday and Wednesday, while getting a slight Brexit bounce in early Thursday trading before ending the session flat once again. In currency news, the loonie on Thursday strengthened to a five-week high against the greenback as news of the Brexit deal reached markets. The loonie also got a boost from new economic data, which saw Canadian manufacturing sales increase in August and over 28,000 jobs being added to Canadian payrolls in September. The encouraging numbers could bolster a case for the Bank of Canada to leave its benchmark rate unchanged at 1.75% when the central bank meets later this month.

In the U.S., major indexes traded in a tight range Monday as optimism faded over a “substantial phase-one trade deal” between the U.S. and China. However, U.S. stocks climbed Tuesday in light of strong results from banks and health-care companies at the unofficial start of the Q3 earnings season. On Wednesday, U.S. markets slipped somewhat as Commerce Department data showed that U.S. retail sales had declined 0.3% in September, while markets bounced back slightly Thursday due to more strong earnings from key finance and tech names.

Prevention, Access, Recovery, and Coordination

Safe Harbour officially hands over shelter keys, establishes accessible navigation hub

12h ago

lacombe and sylvan lake

December 2025 (un)employment data released for Alberta sub-regions

13h ago

21 years with WCPS

Darcy Blum appointed principal of Lacombe Outreach School

14h ago

Markets

U.S. Markets Buoyed by Strong Earnings; TSX Relatively Flat

For the four days covered in this report, the Dow added 209 points to close at 27,026, the S&P 500 rose 28 points to settle at 2,998, while the tech-heavy Nasdaq climbed 100 points to close at 8,157. In three days of trading, the TSX added 11 points to end at 16,426.

Equities/Strategy

Strategy

Global trade relations and business investment likely hold greater importance to Canada’s economic trajectory. Despite fiery debates about the scandal surrounding the SNC-Lavalin Group Inc. and the Trans Mountain pipeline expansions project, the outcome of next week’s Canadian election will likely carry few implications for the Canadian economy, stock market, bond market, or currency. Instead, Canada’s economic outcomes will continue to be determined by global effects from slowing oil demand, U.S.- China trade negotiations, and the trajectory of the U.S. economy. Notwithstanding, personal and business tax rates, social and environmental policy, and immigration will remain important kitchen table issues for most Canadians. Not surprisingly, the Liberals and the Conservatives have prescribed different remedies to the same malady: trying to help the average Canadian get ahead and stay ahead. The Liberals, and there left leaning counterparts, would favour expanding social policies such as child care, pharmacare for all, whereas the Conservative Party would prefer to lessen the tax burden for consumers, freeing them up to make their own choices. The middle class was a major talking point for candidates in 2015, particularly for the Prime Minister, and while the Liberals come into this election with soaring job growth and unemployment at a record low, there are many voters who do not feel as if they are doing better financially.

(Bill Curry)

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.