Market Report

Mid-November 2018 Issue | Released Bi-weekly.

Authors: Daniel Goloubov, Richard Hoang, Shenning Wang

Editors: Aman Regmi

November 12th, 2018


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Canadian Markets

The S&P/TSX Composite Index increased by
2.59% from around 14,888 to 15,274 over the
past two weeks. The index finished off the
historically weak October month strongly,
largely driven by gains in the health-care sector,
before taking a slight dip closer to the end of
the two-week stretch, as a plunge in oil prices
piled pressure on energy shares.


The S&P/TSX Venture Composite Index
S&P TSX
increased by 1.22% from 643.58 to 651.42 over
the past two weeks. The index rebounded after
a rough month, similar to its S&P/TSX
Composite counterpart - one that was
characterized by falling cannabis stocks.
Bombardier has announced that it will be
slashing 5000 jobs, mostly in Canada, as the
Montreal-based plane and train manufacturer
seeks to slim down for its new restructuring.
South of the border, a federal judge granted an
injunction to halt the construction of the
Keystone XL pipeline, a decision that many oil
S&P TSX Venture industry experts believe may cost Canada
hundreds of millions. Additionally, Canadian
officials pushed back at US negotiators,
claiming the US has been aiming to modify
some of the language of the USMCA trade pact
agreed on earlier in September. Tariffs on
Canadian steel and aluminum remain an area of
contention. 


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U.S. Markets

The S&P 500 rose 5.3% from around 2,641.25
to 2,781.01 over the past two weeks. The S&P
500 closed in the red for three-quarters of
October's trading sessions and positioned in
correction territory on October 29. The S&P 500
still recorded strong gains for the past two
weeks, following post-midterm elections. The
U.S. midterm elections produced a widely
expected outcome of a divided government,
sparking a “relief rally” in stocks.
S&P 500
Dow Jones Industrial Average rose by 6.3%
from around 24,442.92 to 25,989.30. On
November 9, Dow dropped 200 points on
worries about slowing global economic growth,
as oil drags down energy stocks and China
worries as well as rate worries weigh.

The NASDAQ went up 5.1% from around

7,050.29 to 7,406.90 over the past 2 weeks. On
Friday, NASDAQ was held down as shares of
Facebook, Amazon, Netflix and Alphabet all
traded lower this week. Bonds were also active
with the 10-year U.S. Treasury yield closing at
DJIA 3.19%.

With third quarter reporting season entering its

final stages, more than 80% of companies have
beaten earnings forecasts, and more than 60%
have beaten sales estimates. In corporate
news, General Electric (GE) downed 6% after an
analyst at JPMorgan Chase published his target
price at only $6 a share. The conglomerate lost
more than half its value this year. Media giant
Disney (DIS) impressed investors with solid
results from its movie studio business, Disney’s
stock was up 2% (Nov. 9) and hit its highest
level in nearly three years. Taking aim at U.S.
NASDAQ tech giants, P resident Trump said his
administration was "looking at" antitrust
proceedings against Amazon (NASDAQ:AMZN),
G o o g l e ( G O O G, G O O G L ) a n d Fa c e b o o k
(NASDAQ:FB). The tech favourites ended this
week on a down note.


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Currencies
USD/CAD EUR/USD

USD/JPY GBP/USD

The USD/CAD jumped 0.40% from 1.30975 to 1.31493 as currency markets returned to their normal
behaviour post US Mid-Term elections. However, the CAD faced its 8-week low as American oil
production increased, driving the already considerably discounted price of Canadian petrol further
down.

The EUR/USD fell 0.07% from 1.1394 to 1.13860 with a noticeable 1-day-peak at 1.15 on Nov 7th.
With a lack of progress in the UK-EU negotiations on Brexit and the increased pressure from
Thursday’s FOMC meeting, we continue to see a bearish stance on the pair.
The USD/JPY rallied and managed an increase of 1.60% from 112.012 to 113.799 with the pair being
on track to a 30-day high through a USD rebound. Portraying a bullish signal, we’re looking forward to
seeing how the pair will build on the momentum as market participants start positioning for the
upcoming FOMC policy updates.

The GBP/USD grew 2.31% from 1.27346 to 1.30282. Despite the short 2-week growth period, the
pound continues to be pressurized with the theme of Brexit and the resignation of Jo Johnson.
Technical analytics present downside signals of subtle losses ahead with the closest support sign
being seen at 1.2930. 

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Commodities
Gold WTI Crude Oil

Natural Gas Sugar

Gold closed off at $1,230.40, a 0.092% fall from $1,231.51. With the U.S PPI data being released on
Friday, the USD boosted higher, weighing down on both gold and silver. Alongside this, FOMC
indicates rate hikes in December and four more in 2019 turning the dollar highly hawkish, therefore
signalling high levels of bearish pressure on precious metals.

WTI Crude Oil closed at $67.29 down 0.74% from $67.79. With crude oil prices being driven lower
and lower by the rise in supply and worries about demand, the markets are trading close to 20% off
their October highs, placing Crude Oil in bear market territory.

Natural Gas drove to new highs at $3.239 from $3.142, representing a 3.1% increase. With cold
weather sweeping much of the country, consumption is being strained on the already low storage.
With this being its largest increase in price within 4 years, we can expect the market to rally as long
as the weather keeps up.

Sugar showed a decrease of 3.14% within the two-week period, striking as an expected slump in the
price. Having the price skyrocket to a 30% nine-month high on October 25th, we are starting to see
slight bear signals as the Brazilian Real recovers. With Brazil focusing production on ethanol and
India subsidizing sugar exports, we begin to see more and more pressure on the price of sugar. 

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Economic Updates
Date Country Event Actual Forecast Previous
Oct 29, United Personal Spending MoM SEP 0.40% 0.40% 0.50%
2018 States

Oct 30, EA (Eurasian

2018 Parent Org.) Inflation Rate YoY Flash OCT 2.20% 2.20% 2.10%

Nov 02, Canada Balance of Trade SEP C$ –0.42B C$ 0.40B C$ –0.55B

2018

Nov 08,
2018 China Balance of Trade OCT $34.01B $29.00B $31.70B

Nov 08, China Exports YoY OCT 15.90% 11.00% 14.50%

2018

Nov 11, United

2018 Kingdom GDP Growth Rate YoY 1.50% 1.50% 1.20%

Personal spending in the United States rose 0.4% from a month earlier in September of 2018,
matching market expectations. Exports from China rose 15.6% year over year to USD 217.28 billion in
October of 2018 as firms increased shipments before stiffer US tariffs hit in January 2019. Rising
inflation would be a catalyst to push the U.S. Fed toward raising interest rates at a faster pace than
currently expected. Investors should closely monitor U.S. retail sales figures for October, which will
be released mid-November. The Bank of Canada has a target inflation band of 1 - 3 % and uses CPI
and Core CPI as its principle gauge. The key gauge for inflation reflects a decline in the purchasing
power of the Canadian Dollar, meaning each Dollar buys fewer goods and services.

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Economic Calendar
Date Country Event Forecast Previous
Nov 14,
2018 United States Inflation Rate YoY 2.40% 2.30%

Nov 15,
2018 United States Consumer Price Index YoY 4.50% 4.70%

Nov 15, United States Retail Sales YoY 4.50% 4.70%

2018

Nov 16, Canada GDP Growth Rate YoY 2.10% 2.25%

2018

Nov 14,
2018 Canada Foreign Securities Purchases C$11.1B C$2.82B

Nov 23,
2018 Canada Canada Consumer Price Index YoY 1.25% 1.00%

Earnings Calendar
Earning
Date Company Symbol EPS Estimate
Release Time
Canada Goose
Nov 14, 2018 Holdings Inc. NYSE: GOOS Before market open $0.19

Nov 15, 2018 NVIDIA Corp NASDAQ: NVDA After market close $1.73

Urban Outfitters
Nov 19, 2018 Inc. NYSE: URBN After market close $0.31

Nov 20, 2018 Foot Locker Inc. NYSE: FL After market close $0.91

Nov 20, 2018 Best Buy Co Inc. NYSE: BBY Before market open $0.85

Disclaimer: all information present in this report is for educational and informational purpose only and without warranty of any kind. All
information present in this report represents only the opinion of the writers, which may be influenced by various factors. You are advised to
conduct your independent research and invest responsibly. Investing in markets may not be suitable for all investors, and investing in the
stock market has risks, with the possibility in which you could lose all your investment. Before making your investment decision, please
consult with your financial advisor. York Trading Club is not responsible for your losses, financial or otherwise, as a result of making
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