By Scotia Wealth Management - The Zukiwsky Group

SPONSORED

MARKET WATCH: August 23

Aug 23, 2019 | 12:17 PM

Big Picture

Up-and-Down Week for North American Markets

The U.S.-China trade war and global recession fears continue to hold sway over markets this week as investors try to parse conflicting signals in the U.S. and abroad. U.S. and Canadian markets kicked off the week with gains Monday, buoyed by a rally among shares of banks and tech companies, which surged over news that the White House was laying the groundwork for a new round of trade talks with Beijing. The Dow added 250 points, while the TSX climbed 154 points.

However, the flight to safe-haven assets resumed Tuesday as traders focused on concerns over a global slowdown. In Canada, energy shares mirrored declining oil prices as worries over demand re-emerged. Markets bounced back Wednesday, however, after strong earnings reports from U.S. retailers eased some fears over the well-being of the U.S. consumer. But N.A. markets wavered Thursday after weaker-than-expected manufacturing data raised fresh worries over the health of the U.S. economy. Preliminary data showed U.S. factory activity slowed in August, as the purchasing managers index fell to 49.9 in August, falling below 50 for the first time in about a decade. While the Dow was up slightly, the TSX, S&P 500 and Nasdaq surrendered ground.

Turning to Europe, Germany on Wednesday sold 30-year debt at a negative yield for the first time, as investors hungry for safe assets bet that yields will head even lower. Demand for government debt has been extremely strong this year, as central banks around the world continue to lower rates in an effort stave off a global recession. Meanwhile in Italy, the yield on Italian government debt reached its lowest level in roughly three years Wednesday, following the resignation of Prime Minister Giuseppe Conte. The breakdown of Italy’s government comes at an especially critical time as the world’s eighth-largest economy continues to struggle from the effects of global trade tensions.

Last seen March 31

Missing: Eugenie Headman, 66, of Maskwacis

9h ago

mayor hopes to meet housing minister this month

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

Apr 02, 2026

Last seen Jan. 15

Missing: Courtney Cattleman, 17, of Maskwacis

Apr 02, 2026

Markets

N.A. Markets Gain Ground

For the four days covered in this report, the Dow climbed 366 points to close at 26,252, the S&P 500 added 34 points to settle at 2,923, while the tech-heavy Nasdaq rose 95 points to close at 7,991. In Canada, the TSX gained 103 points to end at 16,253.

Strategy

2019 word of the year: Protectionism

Protectionist trade policies are intended to shield legacy industries in developed nations from off-shoring jobs and production to jurisdictions with comparatively cheaper labour and looser regulations. In the case of the U.S.-China trade spat, protectionist trade policies serve three purposes: protecting legacy jobs, incentivizing and exacting structural changes from a previously unwilling Chinese government, and stemming the rise of a strategic and technological threat. The tangible effect of tariffs on the broader economy has been small to date but uncertainties stemming from protectionist measures have depressed sentiment and, thus, weighed on growth. Nevertheless, the pace of hiring in July (164k) was in-line with the year-to-date trend (165k) and remains well-above estimates of job growth needed to maintain the current unemployment rate, roughly 100k jobs per month. Continued job growth, paired with rising wages, should allow consumer spending to maintain its current levels and remain the dominant growth engine for the U.S. economy.

(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.}