IAIC Market Update - September 13, 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 with Canada’s jobs report for August beating expectations by adding 90,000 in the month. The unemployment rate fell to 7.1% from 7.5%. The Canadian economy is 200,000 jobs below February 2020 levels, with the hospitality sector making up much of the lost ground as reopening continues.
• To continue to bolster our economy the Bank of Canada left its supportive monetary policy actions unchanged. The Bank Rate is ½%, and the overnight rate and the deposit rate have been held steady at ¼%. The bond buying program also remains unchanged. (Source)
• A lingering condition that has been influencing economic growth is supply-chain disruptions. As businesses reopen and attempt to return to full production, the availability of raw materials and component parts has not been universal. For example, the backlog of vehicles is large as the shortage of computer chips prevents the delivery of fully finished cars and trucks to new buyers. Recently automakers have announced plant closures and layoffs until the supply chain issues are resolved. Similar situations are found across the economy, and until it is resolved, the return to full production will be difficult.
• As a result, equity markets have reflected the current and looming issues as the major North American indices lost value last week. As noted in previous Market Updates, volatility is expected to increase while these issues work themselves out.
  
  

What’s ahead for this week?

• In Canada, manufacturing sales and new orders for July and the Consumer Price Index for August along with the existing home sales, housing-starts and average home prices will be released.
• In the U.S., inflation for August through the Consumer Price Index is the most significant indicator to be released this coming week. Industrial production will also be announced along with the important retail sales figures.
• Globally, Japan’s industrial production, machine orders and trade balance, China’s retail sales, industrial production, Eurozone consumer inflation, industrial production and trade surplus will all be released.