The first day of trading in 2019 ended with North American equity markets marginally higher

Posted: Thursday, January 3, 2019 - 09:07 EST

The first day of trading in 2019 ended with North American equity markets marginally higher to end the day.  Negative sentiment related to the U.S. government shutdown along with global trade tensions led to a negative start yesterday in equity markets.  This morning, the tone in markets are turning downward once again after Apple revised their revenue growth expectations for the year. Investors are translating the Apple news into further concerns of a slowdown in global growth, especially related to China.  This morning, ADP employment showed a strong increase for December payrolls in the U.S., adding 271k jobs, although the previous month was revised lower by 22k.  Although the predictive power from ADP for actual non-farm payrolls is not the most accurate, the stronger ADP data this morning had led to a minute increase in yields.

The Canadian corporate credit market continued to be quiet yesterday following the New Year holiday.  Flows were mostly sporadic with accounts looking to raise cash.  Apple spreads are approximately 3bps wider this morning following the note from Tim Cook to employees related to a slowdown in iPhone sales.  The better trading tone late in the day kept credit spreads more constructive, although spreads ended the day mostly unchanged.

Equity Markets:

  Index Level % Change QTD YTD Q3 2017 Q4 2017 Q1 2018 Q2 2019 Q3 2019 Q4 2019
S&P 500 2,510.03 0.13% 0.13% 0.13% 4.48% 6.64%

-0.76%

3.43% 7.71% -13.52%
TSX

14,347.16

0.17%

0.17%

0.17%

3.68% 4.44%

-4.52%

6.77% -0.56% -10.11%

Rates:

 

Today

% Change

QTD change

YTD change

Q3 2017

Q4 2017

Q1 2018

Q2 2018

Q3 2018

Q4 2018

Canada 5 Year

1.85%

-0.04% -0.04% -0.04% 1.75% 1.87% 1.97% 2.07% 2.34% 1.89%
Canada 10 Year 1.92% -0.05% -0.05% -0.05% 2.10% 2.05% 2.09% 2.17% 2.43% 1.97%
Canada 30 Year 2.13% -0.05% -0.05% -0.05% 2.47% 2.27% 2.23% 2.21% 2.42% 2.18%
30yr Generic Corporate A rated Spread 1.50% 0.00% 0.00% 0.20% 1.24% 1.21% 1.24% 1.28% 1.30% 1.50%
30yr All-in Corporate A rated Yield

3.63%

-0.05% -0.05% 0.15% 3.71% 3.48% 3.47% 3.45% 3.72% 3.68%
US 10 Year 2.64% 0.02% -0.05% -0.05% 2.33% 2.41% 2.74% 2.86% 3.06% 2.69%
CDX IG 88.984 0.196                

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.