MarketWatch

Written by Sid Mohapatra 

Domestic risk markets post their best weekly gain since April last year leading the TSX to close at record high levels. We continue to observe the effects of the vaccine rollout and improved expectations on President Biden’s fiscal stimulus package as drivers of this rally. On the commodities front, WTI had a phenomenal week and reaching a 52 week high, clocking in an almost 10% gain for the week, which in turn supported Canadian equities. Despite such positive movements, we did see a significant job loss in the January job report in Canada with the economy shedding 213,000 jobs thereby putting the unemployment rate at 9.4%, the highest since August. Having said that we continue to maintain the recovery of jobs in labour markets through the course of the year. This will be the result of a decrease in new COVID 19 cases and a gradual easing of the lockdown measures. More importantly, consumer spending will remain robust as it continues to be supported by fiscal spending, accommodative central banking actions and the steady rollout of vaccines.

The TSX closed at 18,123 with a 4.5% gain over the week and the S&P 500 finishing at a strong 3,887 for the week up nearly 4.6%. Oil had a terrific rally finishing at $56.28 per barrel, which gained a whopping 9.2% for this week. 

The earning season continues in Canada with roughly 20% of TSX listed companies reporting this week but the economic calendar is light in Canada for the coming week. In the US, we can expect the small-business optimism report on Tuesday, with important inflation data on Wednesday followed by consumer confidence on Friday.