Weekly Market Update (March 4 – March 8)

Co-Written by: Samuel Buddy Wiseman-Barker & Steven A. Klos

Major indices across North America struggled to gain ground this week with the Dow Jones down -1.17%, S&P 500 down -1.12%, and the TSX down -0.45%. The week started off with optimism as the US-China trade talks were thought to be “in final stages” however, there was no official news to back this claim. As a result, the TSX among other indices recorded their first substantial loss of 2019. The depth of the economic slowdown has been formally acknowledged by the Bank of Canada, suggesting that interest rates will remain on hold until further consideration. Positive corporate profits amid favourable interest rates advocate that stocks will continue to rise, however, future growth may not be as steep as we experienced over the first two months of 2019.

Both US and Canadian job reports for the month of February stunned the market, with Canada adding 55,900 jobs vs 1000 expected, and the US adding 20,000 jobs vs 180,000 expected. Alongside the 66,800 jobs added in January, Canada is off to the best start to the year since 1981 with 122,700 new full-time positions present in the economy. Canada’s industries’ that offered the most growth in February consisted of professional, scientific and technical services which provided 18,000 full-time employment opportunities in Ontario and Quebec. One of the main contributors to the US jobs miss was 31,000 construction jobs gone, which has historically been an important indicator of an economy’s health in the near term.

United States Senator Elization Warren, who is running for the Presidency, made a public announcement of her plans to break up large tech companies such as Amazon, Facebook, and Google. She expressed her worries of them having too much power over our economy, society and democracy-stating that big tech has suppressed competitive innovation by using our personal information to tilt the “playing field”. Sen. Warren aims to promote more competition within the technology sector by limiting the growth of Silicon Valley. Her statements quickly dragged down the technology sector at the end of the week as investors are fearful that large tech won’t be able to continue the growth that we’ve seen since the 2008 financial crisis.

Sunday pre-market futures point towards negative opens across all major North American indices as investors worries have not stabilized from last weeks uncertainty.