Global stocks rallied

Posted: Tuesday, December 11, 2018 - 09:09 EST

Global stocks rallied as optimism grew on China and U.S trade negotiations. Despite China being unhappy about the arrest of Huawei’s CFO last week, both sides moved forward with negotiations.  Over the year, the escalation of trade tensions has significantly pressured the Chinese economy and financial markets. The Chinese government is willing to make concessions by cutting tariffs on U.S. made cars from the current retaliatory rate of 40% back to 15%. Global markets continue to digest developing news on Brexit. The UK Prime Minister is seeking help from EU to improve the deal and is considering January 21st as the new deadline for the UK Parliament vote. Without a resolution over Ireland’s boarders, it is unlikely to win the vote.  

Yesterday, Canadian credit markets remained constructive with healthy two way trades. Credit spreads closed 1 to 2 bps wider, largely due to market volatility. Moody’s downgraded Anheuser-Busch InBev (ABBIB) from A3 to Baa1. The downgrade was largely expected due to significant foreign currency fluctuations and underperformance of its emerging markets businesses. 

Equity Markets:

 

  Index Level % Change QTD YTD Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
S&P 500 2,637.72 0.18% -9.10% 0.50% 3.09% 4.48% 6.64% -0.76% 3.43% 7.71%
TSX

14,728.28

-0.45%

-7.84%

-6.58%

-1.64% 3.68% 4.44% -4.52% 6.77% -0.56%

Rates:

 

Today

% Change

QTD change

YTD change

Q2 2017

Q3 2017

Q4 2017

Q1 2018

Q2 2018

Q3 2018

Canada 5 Year

2.02%

0.01% -0.32% 0.16% 1.39% 1.75% 1.87% 1.97% 2.07% 2.34%
Canada 10 Year 2.07% -0.01% -0.36% 0.02% 1.76% 2.10% 2.05% 2.09% 2.17% 2.43%
Canada 30 Year 2.22% -0.02% -0.20% -0.05% 2.15% 2.47% 2.27% 2.23% 2.21% 2.42%
30yr Generic Corporate A rated Spread 1.30% 0.02% 0.00% 0.02% 1.21% 1.24% 1.21% 1.24% 1.28% 1.30%
30yr All-in Corporate A rated Yield

3.52%

0.00% -0.20% -0.03% 3.36% 3.71% 3.48% 3.47% 3.45% 3.72%
US 10 Year 2.87% 0.01% -0.19% 0.46% 2.31% 2.33% 2.41% 2.74% 2.86% 3.06%
CDX IG 78.730 -2.658                

The information contained herein is intended for advisors for general information only and is compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made as to its accuracy. All opinions contained in the commentary and expressed by the portfolio manager are subject to change without notice and are provided in good faith without legal responsibility. All market data is sourced from Bloomberg.