By Scotia Wealth Management - The Zukiwsky Group

Sponsored

Market Watch: Oct. 15

Oct 15, 2021 | 12:08 PM

Big Picture

U.S. Markets Wobble as Concerns Mount Over Slowing Growth, Inflation

U.S. indexes surrendered ground on Monday, as fears continue to rise over the prospect of slowing growth and inflation, driven by supply-chain problems, rising energy prices and labour shortages, especially in the U.S. While many investors have been acutely focused on inflation, tepid growth has also become a concern, causing Goldman Sachs to lower its projections for U.S. growth in Q4. The Dow, Nasdaq and S&P 500 all registered modest losses Monday, while the TSX was closed for the Thanksgiving Day holiday.

Losses in U.S. equity markets were a bit more subdued on Tuesday, but sentiment took another hit after the International Monetary Fund lowered its global growth expectations, citing the lingering effects of the Delta variant. In Canada, the TSX rose 21 points, buoyed by the materials sector, especially rising gold prices, as some investors flocked to the safe-haven metal over inflation concerns.

On Wednesday, the S&P 500 snapped a three-session losing streak, despite new data showing inflation accelerated slightly in September, rising 0.4 per cent from August and 5.4 per cent year-over-year. Meanwhile, the Nasdaq added 106 points, the Dow was flat, and the TSX jumped nearly 200 points, as hot U.S. inflation data bolstered the materials sector once again.

mayor hopes to meet housing minister this month

Alberta demands Ottawa back off on housing funding stripped from Red Deer

15h ago

Last seen Jan. 15

Missing: Courtney Cattleman, 17, of Maskwacis

20h ago

eyes up

Air Spray training around Red Deer Regional Airport

20h ago

U.S. equity markets posted healthy gains Thursday, boosted by better-than-expected earnings from major U.S. banks and new data showing that initial jobless claims in the U.S. fell to 293,000 (from 329,000 last week) — the first reading below 300,000 since the pandemic began. By Thursday’s close, the Dow had added 535 points, while the Nasdaq and S&P 500 were up 252 and 74 points, respectively. In Canada, the TSX added 201 points, buoyed by the health care, energy and materials sectors.

North American Markets Up After Strong Thursday

For the four trading days covered in this report, the Dow rose 166 points to close at 34,912, the S&P 500 added 47 points to settle at 4,438, while the tech-heavy Nasdaq jumped 244 points to close at 14,823. In Canada, the TSX surged 404 points to end at 20,820.

Strategy

December x-date appears most likely, but it is possible for the Treasury to stretch its capabilities into next year

The timing of the so-called “x-date” is still unknown as the debt ceiling was raised US$480 billion and figures to push the deadline sometime into December so that it lines up with the government funding deadline, December 3rd. However, given that Treasury has US$48 billion in extraordinary measures and US$86 billion in cash on hand, it’s possible the extra US$480 billion could allow Treasury to borrow for at least a couple weeks beyond December 3rd. If Treasury can make it that far, on December 31st a modest amount of additional extraordinary measures become available.

If it can get into January, which is typically a surplus month, then Treasury’s cash balances could potentially stretch all the way into February, at which point its balances would be rapidly depleted by tax refund season.

There are many factors influencing the situation at hand, and very little in terms of concrete details about how the Democrats intend to proceed. The most straight forward path lies through the reconciliation process, but the Dems do not want to be unilaterally tagged with the solution to a problem both parties contributed to.

Disclaimer

This report is provided to you for informational purposes only and is not intended to provide personal investment advice. This report does not include or constitute an investment recommendation and does not take into account the particular investment objectives, financial conditions, or specific needs of individual clients. Any statements regarding future prospects may not be realized. Before acting on this material, you should consider whether it is suitable for your particular circumstances and talk to your investment advisor.

The author(s) of the report and the supervisors of the Global Portfolio Advisory Group may own securities of the companies included herein.

Scotia Capital Inc. is what is referred to as an “integrated” investment firm since we provide a broad range of corporate finance, investment banking, institutional trading and retail client services and products. As a result we recognize that there are inherent conflicts of interest in our business since we often represent both sides to a transaction, namely the buyer and the seller. While we have policies and procedures in place to manage these conflicts, we also disclose certain conflicts to you so that you are aware of them. Please note that we may have, from time to time, relationships with the companies that are discussed in this report.

The Global Portfolio Advisory Group prepared this report by analyzing information from various sources. Information obtained in the preparation of this report may have been obtained from the Equity Research and Fixed Income Research departments of the Global Banking and Markets division of Scotiabank. Information may be also obtained from the Foreign Exchange Research and Scotia Economics departments within Scotiabank. In addition to information obtained from members of the Scotiabank group, information may be obtained from the following third party sources: Standard & Poor’s, Morningstar, Bloomberg, Credit Suisse AG, Perimeter Markets Inc., and FactSet. The information and opinions contained in this report 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.

While the information provided is believed to be accurate and reliable, neither Scotia Capital Inc., which includes the Global Portfolio Advisory Group, nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Neither Scotia Capital Inc. nor its affiliates accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents.

Nothing contained in this report is or should be relied upon as a promise or representation as to the future. The pro forma and estimated financial information contained in this report, if any, is based on certain assumptions and analysis of information available at the time that this information was prepared, which assumptions and analysis may or may not be correct. There is no representation, warranty or other assurance that any projections contained in this report will be realized.

Opinions, estimates and projections contained herein are those of the Global Portfolio Advisory Group as of the date hereof and are subject to change without notice. For that reason, it cannot be guaranteed by The Bank of Nova Scotia or any of its subsidiaries, including Scotia Capital Inc. This report is not, and is not to be construed as: (i) an offer to sell or solicitation of an offer to buy securities and/or commodity futures contracts; (ii) an offer to transact business in any jurisdiction; or (iii) investment advice to any party. Products and services described herein are only available where they can be lawfully provided. Scotia Capital Inc. and 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.

Trademarks are the property of their respective owners.

Copyright 2021 Scotia Capital Inc. All rights reserved.

This report is distributed by Scotia Capital Inc., a subsidiary of The Bank of Nova Scotia. Scotia Capital Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.

® Registered trademark of The Bank of Nova Scotia, used under licence. Scotia Wealth Management® consists of a range of financial services provided by The Bank of Nova Scotia (Scotiabank®); The Bank of Nova Scotia Trust Company (Scotiatrust®); Private Investment Counsel, a service of 1832 Asset Management L.P.; 1832 Asset Management U.S. Inc.; Scotia Wealth Insurance Services Inc.; and ScotiaMcLeod®, a division of Scotia Capital Inc. Private banking and International private banking services are provided in Canada by The Bank of Nova Scotia. Estate and trust services are provided by The Bank of Nova Scotia Trust Company. Portfolio management is provided by 1832 Asset Management L.P. and 1832 Asset Management U.S. Inc. Insurance services are provided by Scotia Wealth Management Insurance Services Inc. Wealth advisory and brokerage services are provided by ScotiaMcLeod, a division of Scotia Capital Inc. International investment advisory services are provided in Canada by Scotia Capital Inc. Financial planning services are provided by The Bank of Nova Scotia, 1832 Asset Management L.P., and ScotiaMcLeod, a division of Scotia Capital Inc. Scotia Capital Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Scotia Wealth Insurance Services Inc. is the insurance subsidiary of Scotia Capital Inc., a member of the Scotiabank group of companies. When discussing life insurance products, ScotiaMcLeod advisors are acting as Life Insurance Agents (Financial Security Advisors in Quebec) representing Scotia Wealth Insurance Services Inc.

Scotia Wealth Management consists of a range of financial services provided, in The Bahamas, by Scotiabank (Bahamas) Limited and The Bank of Nova Scotia Trust Company (Bahamas) Limited. International private banking services are provided in The Bahamas by Scotiabank (Bahamas) Limited, an entity registered with The Central Bank of The Bahamas. International investment advisory services are provided in The Bahamas by Scotiabank (Bahamas) Limited, an entity registered with The Securities Commission of The Bahamas. International wealth structuring solutions are provided in The Bahamas by The Bank of Nova Scotia Trust Company (Bahamas) Limited, an entity registered with The Central Bank of The Bahamas.

Scotia Wealth Management consists of international investment advisory services provided, in Barbados, by The Bank of Nova Scotia, Barbados Branch, an entity licensed by the Barbados Financial Services Commission.

Scotia Wealth Management consists of a range of financial services provided, in the Cayman Islands, by Scotiabank & Trust (Cayman) Ltd. International private banking services, international investment advisory services and international wealth structuring solutions are provided in the Cayman Islands by Scotiabank & Trust (Cayman) Ltd., an entity licensed by the Cayman Islands Monetary Authority.

Scotia Wealth Management consists of international private banking services provided, in Peru, by Scotiabank Peru S.A.A, an entity supervised by the Peru Superintendence of Banking and Insurance.