Stocks and government bond yields ended higher for the third consecutive day

Posted: Wednesday, January 9, 2019 - 09:06 EST

Stocks and government bond yields ended higher for the third consecutive trading day, on the back of momentum from Friday’s job data and comments from Fed officials, as well as increased investor confidence around trade negotiations. China and U.S had productive trade negotiations in Beijing.  Without providing any details, both sides appear optimistic.  Today, the BoC will release their rate decision at 10 am.  The overnight rate is broadly expected to remain at 1.75%. Forecasts to the MPR should be little changed, looking for a slower GDP growth in 2019, but higher in 2020.

The Canadian corporate credit market was very active despite no new domestic issuance. Secondary spreads continue to perform well with CDXIG tightening by 2.75 bps. Higher beta sectors, such as Retail and Telecom outperformed with spreads tightening by 4-5 bps.   

Equity Markets:

  Index Level % Change QTD YTD Q3 2017 Q4 2017 Q1 2018 Q2 2019 Q3 2019 Q4 2019
S&P 500 2,574.41 0.97% 2.72% 2.72% 4.48% 6.64%

-0.76%

3.43% 7.71% -13.52%
TSX

14,605.15

0.70%

1.97%

1.97%

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

1.92%

0.04% 0.03% 0.03% 1.75% 1.87% 1.97% 2.07% 2.34% 1.89%
Canada 10 Year 1.98% 0.03% 0.02% 0.02% 2.10% 2.05% 2.09% 2.17% 2.43% 1.97%
Canada 30 Year 2.18% 0.03% 0.00% 0.00% 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

3.68%

0.03% 0.00% 0.20% 3.71% 3.48% 3.47% 3.45% 3.72% 3.68%
US 10 Year 2.74% 0.02% 0.06% 0.06% 2.33% 2.41% 2.74% 2.86% 3.06% 2.69%
CDX IG 77.275 -1.345                

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.