Last Week in the Markets:  April 22nd – 26th, 2019  

What happened?    

  • The anticipation of poor corporate results did not materialize during the current earnings season, and the TSX, S&P 500 and the NASDAQ all reached new all-time highs.  The Dow almost accomplished the same feat after turning in a strong 1.2% gain last week.  Approximately 40% of corporations in the S&P500 have announced their results and their strong performance is anticipated to continue for the remaining 60%.
  • Wednesday’s Bank of Canada rate announcement kept its target overnight rate unchanged at 1.75%, as it expressed concern for Canada’s economic growth in 2019.  The Bank’s projection for Canada’s Gross Domestic Product (GDP) growth for 2019 is 1.2% and 2% in both 2020 and 2021.  Global economic growth is projected to be 3.25%, so the Canadian economy is expected to perform below the global average.  Inflation is expected to hover at 2% for this 3-year period. https://www.bankofcanada.ca/2019/04/fad-press-release-2019-04-24/  
  • Conversely, the American economy achieved GDP gains above expectations, which explains some of the corporate earnings performance.  and accompanying rationale.  GDP grew by 3.2% during the first quarter of 2019, at the Bank of Canada’s global growth rate, and far above our 1.2% growth rate.  
  • The price of oil is expected to continue its recently volatile path as political pressure mounts.  President Trump is determined to remove waivers that allowed nations to trade in Iranian oil.  The removal of these waivers makes Iranian oil unavailable, shortens global supply and provides upward price pressures.

What’s ahead for this week?

  • In Canada, the most significant news for investors will be the announcement of February’s Gross Domestic Product (GDP), which describes our economy’s growth rate and overall health.
  • In the U.S., the Federal Reserve announces an interest rate decision along with construction spending, durable goods orders and personal income and spending for March, and April’s employment reports (new jobs, net jobs, unemployment rate).