Market Report

Late-January 2019 Issue | Released Bi-weekly.

Authors: Aires Moura, Marcus Whiltsie

Editors: Aman Regmi

January 28th, 2019


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Canadian Markets

The S&P TSX composite index saw a percentage
increase of 3.31% over the past two weeks as
the market moved from 14,874 to 15,366. This
was notable as it was the 5th straight week of a
rally, seeing the market close at an 11-week
high. The rally was due, in large part, to the
financial sector as it preformed particularly
well. Several large banks saw increases in their
share prices over the past two weeks. With a
notable standout being the Toronto Dominion
S&P TSX Bank (TD) whose share price increased by
6.48% double that of others in the industry as
Bank of Nova Scotia (BNS) and the Royal Bank
of Canada (RBC) increased by only 3.72% and
2.92% respectively.

The S&P Venture Composite Index also saw

increases in its price, rising by 0.98% from
598.70 to 604.56 over the past two weeks.
Higher mineral prices were a significant factor
in this rise. However, due to the composition of
the index, with materials making up 43% of the
S&P TSX Venture total index, the much larger increases in other
industries (specifically financials) did not
translate into as much growth for the overall
index. 


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U.S. Markets

The S&P 500 saw an increase of 3.38% as the
index rose from 23,850 to 24,730 amid higher
earnings expectations and a generally positive
outlook for the year of 2019. With the market
moves thus far in 2019 some investors believe
that the index is on pace to double in 2019.

The Dow Jones Industrial Average increased by

S&P 500 3.69% from 23,850 to 24,730 over the past two
weeks thanks in large part to a significant surge
in technology stocks. Facebook (FB) saw an
increase of 3.03% and Alphabet (GOOG)
increased by 2.71% over the past two weeks.
Furthermore, many other technology companies
also benefited from the uptick in the technology
sector as investors made their way back into
the market following the large market selloff in
November and December of 2018.

The NASDAQ showed the smallest increase of

all the indexes rising only 2.71% from 6,971 to
DJIA
7,164 since January 11th.

The weeks ahead will be an interesting test of

the market as several important economic
events are upcoming, specifically an important
meeting for the federal reserve and several
companies’ earnings reports. The meeting of
the Federal reserve on the 29th-30th will be of
interest going forward as it is expected that
they will announce an interest rate increase of
25 basis points.


NASDAQ

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Currencies
USD/CAD EUR/USD

USD/JPY GBP/USD

The USD/CAD fell 0.45% to 1.32153 over the past two weeks despite a pickup in the US Treasury
bond yields. Oil prices rose on Friday, supporting the Loonie and collaborating to the USD/CAD slide
on Friday, which saw the most volatility in the past two weeks.
The EUR/USD closed at 1.1415, down 0.54% due to poor eurozone PMI estimates, predicting
economic growth to be losing strength. The German government downgraded its 2019 GDP forecast.
Germany is a key economic powerhouse in Europe, and when it experiences slowing growth it has a
large effect on the European economy.
The USD/JPY was up 1.28% at 109.545, supported by the Bank of Japan cutting its inflation
forecasts and maintaining its large stimulus program. Governor Haruhiko Kuroda warned of growing
risks to the economy from trade protectionism and slowing global demand.
The GBP/USD closed at 1.3203, up 2.63%. The main reason for this is because of the changes to
Prime Minister May’s Plan B which focuses on preventing a no-deal Brexit, and will be voted on this
Tuesday.


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Commodities
Natural Gas Crude Oil

Gold Copper

Natural gas closed at 3.137, down 14%. Due to cooler temperatures, the demand for natural gas has
increased. However, as natural gas levels headed toward the normal range, prices have fallen. Supply
of Natural gas is about 11% below average for this time of year. However, unless the rest of the
winter is extremely cold, it is suggested that natural gas prices may spend most of 2019 below
$3.00.
Crude Oil closed at 53.51 which translated to a 5.6% gain. Supporting the gains were the OPEC-led
supply cuts and political turmoil in Venezuela, which could lead to a supply disruption. Even though
there was a gain over the past two weeks, worries over a global economic slowdown could lead to a
lower demand for crude oil.
Gold closed at 1302.83, up 0.78% due to the drop in the US dollar. The sell-off of the US dollar was
fuelled by the Federal Reserve officials nearing a decision on when to end the reduction of the
Treasury bonds it is holding on its balance sheet, a key consideration for investors watching how far
the central bank will go in tightening monetary policy. An easing of monetary policy could drive the
U.S. Dollar lower, making dollar-denominated gold a more attractive asset.
Copper closed at 2.72189, up 3.95%. Signs of copper being in a period of decreasing supply short
can be seen in the decrease of the supply of copper in the warehouses of commodity exchanges. 

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Economic Updates
Date Country Event Actual Forecast Previous

14-01-19 China Exports (YoY) -4.4% -3% 5.4%

15-01-19 Eurozone Trade Balance 19.0B 13.7B 14.08B

16-01-19 Great Britain CPI (YoY) 2.1% 2.1% 2.3%

ADP Monthly Employment

17-01-19 Canada Change -13K - 39.1K

18-01-19 Canada CPI (YoY) 2.0% 1.7% 1.7%

23-01-19 Canada Retail Sales (MoM) November -0.9% -0.6% 0.2%

Overall, the Exports data for China disappointed the world economy in mid-January. Year over year
exports fell by 4.4%, 1.3% higher than forecasted. This is sound proof that trade tensions have
impacted the Chinese economy drastically and can further affect markets going forward. While on
the other hand, the European Union posted a trade surplus implying that exports are growing. The
CPI in Britain stayed stagnant due to ongoing Brexit deal complexities and uncertainty. The Canadian
economy presented mixed signals to close the year as it reported a negative employment change
while a positive inflation followed by negative retail sales growth approaching the holiday season.

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Economic Calendar
Date Country Event Forecast Previous
30-01-19 Eurozone Consumer Confidence -7.9 -7.9

30-01-19 United States GDP Q4 1.7% 1.5%

30-01-19 United States Fed's Interest Rate Decision 2.5% 2.5%

31-01-19 Eurozone GDP (YoY) 1.2% 1.6%

30-01-19 Eurozone Unemployment rate (Dec) 7.9% 7.9%

01-02-19 United States Nonfarm Payrolls (Jan) 168K 312K

Earnings Calendar
Company Earnings
Date Symbol EPS estimate
Name Release time
28-01-19 Whirlpool Corp. NYSE: WHR After market close $4.30

Advanced Micro
29-01-19 Devices NASDAQ: AMD After market close $0.06

29-01-19 Allergan plc. NYSE: AGN Before market open $4.15

29-01-19 Apple Inc. NASDAQ: AAPL After market close $4.17

29-01-19 EBay Inc. NASDAQ:EBAY After market close $0.56

Disclaimer: all information present in this report is for educational and informational purpose only and without warranty of any kind. All
information present in this report represents only the opinion of the writers, which may be influenced by various factors. You are advised to
conduct your independent research and invest responsibly. Investing in markets may not be suitable for all investors, and investing in the
stock market has risks, with the possibility in which you could lose all your investment. Before making your investment decision, please
consult with your financial advisor. York Trading Club is not responsible for your losses, financial or otherwise, as a result of making
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