Weekly Market Update (October 16 – October 20, 2017)

It was another great week for investors as markets around the world reached all-time highs. In the United States, the Dow Jones concluded at 22,871.22 with the S&P 500 finishing off at 2,553.17 on Friday. American markets were buoyed by a strong start to the earnings season. CNBC reports that approximately 73% of S&P 500 companies that have released their quarterly results, so far, have beat their earnings estimates. News of which continues to underline the strong rebound of the American economy as it recovers from the decade long hangover induced by the Great Recession. In addition, Federal Reserve Chair, Janet Yellen spoke to the G30’s International Banking Seminar on Sunday, and reassured concerns over inflation. The comments came after low August inflation figures at 1.3%, significantly missing the Federal Reserve’s 2% target.  Yellen predicted inflation to pick up next year as labour prices start to adjust upwards to the accelerating economy. In Canadian news, the S&P/TSX Composite ended the week with modest gains. Landing at 15,807.20 on Friday, the index posted a 0.5% return from last week. Canada’s economy has also been making a strong rebound this year after large GDP growth figures from the past two quarters. Central Bank of Canada Governor, Stephen Poloz, tried to calm expectations this weekend. At an event on Saturday, he was quoted saying to expect more moderate growth going forwards.

Outside of North America, the headlines were dominated by a couple stories. Japanese steel producer, Kobe Steel, revealed that it falsified quality certificates on steel products sold to many customers. The impact of the revelation could be far reaching as customers like Toyota and Ford must reassess the strength of their cars with the falsified steel. Catalonia was also a major discussion point. The region’s parliamentary President, Carles Puigdemont, held the world on edge as he revealed his next steps over Catalan independence referendum. Puigdemont opted to delay any declaration of independence, explaining to parliament he is pursuing negotiations with Spain’s central government. The news helped the Spanish market recover with the IBEX 35 jumping sharply to from 10,121.70 to 10,301.50 on Wednesday, and stabilizing at 10,272.00 by the end of the weak.