Weekly Market Update (November 20 – November 24, 2017)

November 26, 2017

American markets ended the short trading week higher, after markets were closed Thursday for U.S. Thanksgiving. The S&P 500 and Dow Jones, broke a 2-week streak of losses for the indices – pushing higher to break new intraday records. All sectors posted gains, leading record levels highs for both the S&P and NASDAQ. Telecomm stocks lead the market gains, after the FCC announced its intentions to repeal the net neutrality laws. Stocks in the NASDAQ Composite performed well this week, leading to a 21 point gain on Friday to close at 6,889. The Semiconductor Index jumped 2.7% for the week, after Marvell Technology put in a bid to acquire competitor Cavium. The jump in semiconductor stocks, and gains in Apple, Amazon, Facebook, and Microsoft, pushed the NASDAQ to a 1.6% gain over the week. American bond yields fell this week, following Janet Yellen’s announcement to resign as Fed Chair and a poor durable goods release. Financial stocks took a hit, as a result of the lower yields. Inflationary and political uncertainty caused the spread between short and long term rates to become very narrow. Rates rose later in the week, following the Fed’s meeting which rose the possibility of a rate hike in December.

Canadian markets mirrored the U.S., ending higher at the end of the week. Markets in Canada have ended positive ten of the last eleven weeks. Gains in the TSX could be attributed to rising oil prices, which boosted the energy sector. Oil prices surged after a U.S. stockpiles release was less than expected, together with an announcement that Saudi Arabia suggested an extension to oil supply cuts within OPEC. Healthcare stocks supported the largest gain in Canadian markets, after Valeant’s stock jumped following an announcement it secured a new credit agreement. Canopy Growth Company also rose, after major M&A announcements were made in the medical marijuana industry. Decreasing retail sales brought worries of a slowing economy, causing Canada to be on of the only major world markets not to reach record highs this week. Strengthening oil prices and the depreciation of the USD, resulted in the CAD to trade up on the greenback.

EU’s economic outlook overtook political uncertainty surrounding Brexit and Germany, causing stocks to gain in the region. Eurozone PMI reported higher than expectations, leading investors to become more positive. The European Union released Q3 annualized GDP growth results, amounting to 0.6% QoQ and 2.5% YoY. Growth in the region is greater than that of the U.S. economy. UK Prime Minister won backing for more money to break deadlock Brexit talks. The EU wanted 60B Euros to continue talks, and now the UK has increased their offering from 20B to 40B – which will hopefully reopen the stalled Brexit negotiations. The Japanese cabinet stated that their economy has expanded for seven consecutive quarters now; the longest period of uninterrupted growth since early 2001. Following the announcement, Japanese market closed up for the week – gaining 154 points (+0.7%) to close at 22,550.

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