5 from 5i: Volatility and Investor Sentiment

Chris White Aug 09, 2019

Market View

This week started off with another round of selling following the worst week of the year for the S&P500. It all started with the Fed’s more hawkish than expected outlook and was pushed further by the growing trade uncertainty between the US and China. In addition, the White House is reportedly delaying a decision on allowing US companies to do business with Huawei. The People’s Bank of China pegged the yuan north of the $7 mark for the second consecutive session. China’s exports expectedly rose in July on improved global demand despite escalating US trade pressure. European shares were down due to the collapse of Italy’s coalition government and economic contraction in the British economy for the first time since late 2012. Gold crossed $1,500 as investors sought this safe-haven investment. The Canadian dollar was 75.66 cents. U.S. S&P500 was up 0.2% this week and TSX was up 0.4%.

It was a mixed bag this week as investors saw a roller coaster ride. Healthcare jumped the highest by 4.9%, followed by materials at 2.2%. Consumer staples was up 1.4% and consumer discretionary by 1.2%. Energy slid the most by 3.5%, followed by industrials that slipped 0.3%. Technology ended the week flat. CIBC raised price target of WSP Global to $84 from $81 citing the company’s solid second-quarter performance and stronger growth outlook in 2020. Canadian Tire Corp reported a lower-than-expected quarterly profit, due to lower margins in its petroleum retail business. Magna International cut its sales forecast for the year as it expects a drop in vehicle production in North America and Europe. This is largely due to the impact of the US-China trade tensions. MG now expects total sales of $38.9 billion to $41.1 billion, versus the previous estimate of $39.1 billion to $41.3 billion. The most heavily traded shares by volume were B2Gold, Encana Corp and New Gold.

5 from 5i

Here are five reads we found interesting last week:

-Recent volatility and investor sentiment

-Thinking about a negative interest rate environment

-Buyback trends lower in 2019

-Before switching funds

-Cloud kitchens, an upcoming industry revolution in India


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