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Weekly market wrap March 2, 2018: Market indices slide on Fed hawkishness, tariff threats
8/18/2018 12:08:22 PM
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By Fund Library News Wire  | Friday, March 02, 2018


 

By Mike Keerma

* Market indices slide on Fed hawkishness, tariff threats.
* Five Excel funds to merge with Sun Life funds.

* Market indices slide on Fed hawkishness, tariff threats. The main U.S. market gauges posted weekly losses, as market sentiment soured on Federal Reserve Board Chairman Jerome Powell’s hawkish comments last Tuesday, suggesting as many as four hikes to the federal funds rate this year. Concerns about rising inflation were further fueled by a surge in the U.S. Institute for Supply Management’s manufacturing index in February, which climbed to its highest level in nearly 14 years. The S&P 500 Composite Index slipped 2.0% on the week, while the Nasdaq Composite Index dropped 1.1%. Canada’s S&P/TSX Composite Index retreated 1.6% on the week, as crude oil retreated 3.2%, while investors reacted to softer-than-expected economic growth data and the threat made by U.S. President Trump to impose steep tariffs on steel and aluminum imports.

The U.S. Institute for Supply Management’s Purchasing Managers manufacturing index rose to 60.8 in February, up from 59.1 in January. The climb in the index reading, its highest since May 2004, was attributed to booming employment and growing inventory levels, with an extra boost from the tax cuts that President Trump introduced and recently signed into law.

In Canada fourth-quarter gross domestic product grew at a 1.7% pace over the third quarter, quite a bit less than the 2.5% growth expected by the Bank of Canada in its latest projections. In addition, President Trump’s threat on Thursday to impose tariffs on steel and aluminum imports weighed on Canadian energy, industrial, metals and mining, and financial shares, dragging the S&P/TSX Composite to a loss for week. The index was already down 3.2% in February, and is now down 5.1% in the year to date.

In business news, Canada’s big banks continued to report quarterly earnings. Bank of Nova Scotia (TSX: BNS) reported first-quarter net income of $2.337 billion ($1.86 diluted per share), compared to $2.009 billion ($1.57 diluted per share) for the same period last year. BNS also increased its quarterly dividend by $0.03 per common share, to $0.82.

Bank of Montreal (TSX: BMO) reported first quarter net income of $973 million ($1.43 per share) compared with $1.227 billion ($1.81 per share) in the same quarter a year ago. Adjusted net income, reflecting a revaluation of the U.S. net deferred tax asset and a net gain in the prior year came in at $1.422 billion ($2.12 per share).

National Bank of Canada (TSX: NA) reported first-quarter net income of $550 million ($1.46 per share) compared with $497 million ($1.34 per share) in the same quarter of 2017.

And Toronto-Dominion Bank (TSX: TD) wrapped up the banks’ reporting season with first-quarter adjusted net income of $2.946 billion ($1.56 diluted per share), compared with $2.558 billion ($1.32 diluted per share) in the same period a year ago. TD also raised its quarterly dividend by $0.07 per share, to $0.67.

FUND NEWS

* Five Excel funds to merge with Sun Life funds. Sun Life Global Investments and Excel Funds Management announced that on or about June 15, five Excel funds will merge with Sun Life Global Investments funds pending unitholder and regulatory approval, as shown in the following table:

Check Fund Library’s Market Activity page regularly for active updates on key market indexes and commodities.

@FundLibrary – Follow Fund Library on Twitter for daily information and updates.

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© 2018 by Fund Library. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited.

The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.

 
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