Recession risk as told by charts

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Market View

President Donald Trump announced that the U.S. and the European Union have initiated a “new phase” within their relationship and have started talks about lowering tariffs and avoiding a potential trade war. As per an E.U. official, the E.U. has agreed to import more U.S. soybeans and has agreed to lower tariffs on industrial goods.  The Ontario government will reportedly allow private stores to sell marijuana once recreational cannabis becomes legal on October 17. The Canadian dollar was 76.48 cents U.S. The week ended with the TSX flat and S&P 500 up 1.1%.

A poor week overall for the TSX subgroups. Seven of the subgroups performed negatively, with technology falling the most by 5.0%, followed by consumer discretionary down 2.2%, consumer staples down 1.8% and materials and telecommunications down 1.6%. Industrials and Energy rose 1.7% and 1.1% respectively, while the others ended flat. Suncor Energy was up 2.5% after a quarterly profit beat. Barrick Gold fell 6% after the company missed estimates for quarterly profit. Air Canada beat estimates for quarterly profits attributing to robust travel demand and higher fares.  Goldcorp was down 6.2% and New Gold, 20%, after announcing disappointing results. Canadian National Railway saw a spike of 4.3% and Toromont Industries surged up 15% following the news of beating estimates. The last week contained a lot of deal news as well with a group led by Air Canada proposing to buy Aeroplan from Aimia (after previously announcing a departure from this plan) and AGT Food and Ingredients has received a go private offer led by the management team, sending shares higher. The most heavily traded shares by volume were Aurora Cannabis, Yamana Gold and New Gold.

5 from 5i

Here are five reads we found interesting last week:

- What do charts say about the U.S. downturn?

- Action in the utilities sector

- Lessons from the technology sector 

- What is the first law of finance?

 - What personality traits should you harbour for investing?

ICYMI at 5i Research:

-Meet the FAANGs of the TSX

-Answers to the questions from anxious investors

- The dangers of defining yourself as a growth or value investor.

- What do you define risk as?

See our previous Five from 5i here:

Lessons from the World Cup.

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