IAIC Market Update - April 12, 2021

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

• The week ended very positively for North American and global equity investors. The broad-based indices of the TSX, S&P 500 and MSCI’s All-Country World Index achieved record highs. A number of contributing elements played a part:
• The US employment report that was released on Good Friday provided a positive start to the week. The same report for Canadian jobs exceeded expectations for employment and job creation.
• Purchasing Managers Indices (PMI) for services companies indicated an increasing optimism for economic growth. The perspective of corporate purchasers is a strong leading indicator of future economic activity.
• Minutes from the latest Federal Reserve meetings reconfirmed their commitment to low interest rates.
• The International Monetary Fund (IMF) increased its forecast for overall global growth to 6% from 5.5%
• With a drop in the value of the U.S. dollar, commodity prices rose, except for oil. Foreign exchange influences also lifted the materials sectors within the indices as metals rose. 
• The largest technology firms also rose; Amazon, Apple, Microsoft, Alphabet (Google) and Facebook that comprise one-fifth of the S&P 500, contributing strongly to overall record highs.

What’s ahead for this week?

• In Canada, the Bank of Canada will release its latest business outlook, which influences its future monetary policy. Also, February’s manufacturing sales and new orders, and March’s existing home sales and average prices from the red-hot housing market will be announced.
• In the U.S., March inflation numbers will be released through the Consumer Price Index (CPI), as will the budget deficit, retail sales and industrial production. The Federal Reserve Chair, Jerome Powell, will speak at the Economic Club of Washington, where he is expected to continue his organization’s strong support of recovery.