Market week: U.S. indexes gain on positive economic news

01-22-2021
Market week: U.S. indexes gain on positive economic news

Proposed fiscal stimulus, key-sector growth buoy markets

 

The big U.S. stock indexes rallied on the week, with the S&P 500 Composite Index gaining 1.9% and the Nasdaq Composite Index climbing 4.2%. The indexes also touched fresh record highs during the week, as investor sentiment was boosted by the promise of more fiscal stimulus from the Biden administration and the Democrat-controlled congress. Investors’ mood was also bolstered by positive readings from the widely-followed IHS Markit PMI indexes for both the service and manufacturing sectors in January. The service index rose to 57.5 from 54.8 in December, a significant move as the service sector is by the far the largest sector of the U.S. economy. The manufacturing index rose to a record 59.1 from 57.1. The growth in economic activity augurs well for the U.S. outlook, even as Covid-19 infection numbers continue to soar, while the vaccination rollout gathers momentum.

In Canada, the benchmark S&P/TSX Composite Index posted a flat performance on the week, as President Joe Biden’s executive order rescinding the permit for the contentious Keystone XL pipeline from the Canadian border to Nebraska rippled through the energy sector. The S&P/TSX Capped Energy Index weighed on overall index performance, slipping 3.3% on the week. Both crude oil (down 0.1% on the week) and gold (up 1.7%) had little impact on the resource-heavy Canadian benchmark.

Monitor the main stock and commodity indices daily with the Fund Library’s interactive Markets Page.

Fund news

* Fundata announces the 2020 FundGrade A+® Award winners. Financial data provider Fundata Canada on Jan. 22 announced the winners of the 2020 A+ Awards. Awards were presented to 51 companies representing a total of 347 Canadian investment funds. This year, the A+ Awards were presented virtually. The Awards presentation is posted online at https://www.fundgradeawards.com/2020/FundGrade-Awards-2020.aspx.

The FundGrade A+ Award is given annually to investment funds and managers who have shown consistent, outstanding, risk-adjusted performance incorporating up to 10 years of history. The FundGrade A+ Award provides investors, advisors, and fund managers with a single, reliable, easy-to-understand fund-performance rating that is completely quantitative.

* Empire Life launches two new multi-strategy and sustainable global equity segregated funds. The Empire Life Insurance Co. on Jan. 18 debuted two additional segregated funds to its existing suite of six multi-strategy guaranteed investment funds (GIFs) as well as a new standalone fund with a sustainable investing focus.

The multi-strategy offerings provide exposure to exchange traded funds (ETFs) and actively managed investments from third-party managers within one segregated fund solution with greater exposure to growth-oriented securities.

Dave Paterson, CFA, portfolio manager of the Empire Life Multi-Strategy GIFs, says the new segregated funds will provide investors with exposure to growth-oriented global securities through a combination of passive, smart beta, and actively managed strategies.

According to Empire Life, guaranteed investment funds are available only through insurance companies as the investment option of an insurance policy. You don’t buy the fund units directly, but the units are used to determine the benefit value of your policy.

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