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Market Report

Late-November 2018 Issue | Released Bi-weekly.

Authors: Pelumi Obasa & Radin Nojoomi

Editors: Aman Regmi

November 26th, 2018


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Canadian Markets

The S&P/TSX Composite index dropped by
0.96% from around 15,157 to 15,011 over the
past 2 weeks. This change in price was due to
the oil sector seeing a loss for the sixth
consecutive week as low Canadian Oil prices
forced producers to cut production. However, a
gain in the materials sector lowered the impact
of the loss.

S&P TSX The S&P/TSX Venture Composite Index dropped


by 5.66% from around 638.27 to 602.15 over
the past 2 weeks. It has been highly impacted
by the volatility of the major precious metals.
Gold, Silver, Platinum and Palladium have been
extremely volatile over the past 2 weeks which
explains the price drop due to uncertainty.

Oil prices have plunged as the Brent Crude Oil


index has dropped from US$ 70 per barrel to a
low of US$59 per barrel. This change highly
impacted the supply schedule of Canadian
S&P TSX Venture producers. Major retail store Lowes’ is planning
on shutting down 27 stores across 5 provinces
in the following three months. This is due to
management’s strategy looking to shift focus
on more profitable stores. Finally, Prime
Minister Justin Trudeau has addressed the
Alberta Oil price’s as a “crisis” and stated that a
solution must be found immediately. 


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U.S. Markets

The S&P 500 dropped by 4.5% closing at
2632.56. The S&P 500’s correction was led by
energy companies taking a big hit due to lower
oil prices. There are also concerns that trade
talks between the U.S and China did not go
well, which is a significant trade dispute
between two of the most powerful economic
players in the world.

S&P 500
The Dow Jones Industrial Average dropped by
4.4% closing at 24,285. The big-name oil
companies Exxon Mobil (NYSE:XOM) and
Chevron (NYSE:CVX) took big hits due to the
large drop in oil prices.

The NASDAQ dropped by 2.4% over the past


week closing at 6,938. The tech stocks took a
large hit amongst U.S China Trade tensions.

DJIA U.S markets have been very volatile over the


past few weeks with all major indices closing in
the red. This is a result of continued trade
tensions between the U.S and China. Investors
should be paying close attention to the
upcoming G20 summit in Argentina as major
world leaders will meet together to discuss
global economic issues. Apple’s stock
(NASDAQ:AAPL) continued to drop because
Goldman Sachs downgraded the tech company.
U.S markets are expected to continue to
experience volatility with GDP numbers coming
in next week.


NASDAQ

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Currencies
USD/CAD EUR/USD

USD/JPY GBP/USD

The USD/CAD fell 2.7% to 1.32096 over the past two weeks due to trade concerns between the U.S
and China. The Dollar is expected to move even more with GDP numbers coming in next week.
The EUR/USD closed at 1.1380, down 3.65% due to poor German GDP numbers. While the Euro had a
spike earlier this week due to the drop in USD, it finished in the negative continuing a yearlong trend
which has been due to concerns over Brexit negotiations.
The USD/JPY was down .61% at 112.82. While there were large moves in the other major currencies
this week, the Japanese Yen hasn’t moved significantly which is good news for the currency
considering how volatile the currency has been over the past year.
The GBP/USD closed at 1.28146 down 3.91%. The main reason for this is because the U.K and Spain
could not reach a deal on Gibraltar as the U.K leaves the E.U. 


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Commodities
Natural Gas Crude Oil

Gold Copper

Natural gas increased significantly, up 25% to 4.626. Due to cooler temperatures, the demand for
natural gas is increasing.

Gold closed at 1224.34, up 5% due to the drop in the overall markets, the upcoming fed rate hikes
and the drop in the US dollar. This increase in gold prices can be justified as gold is seen as a safe
asset in times of uncertainty.

Crude Oil closed at 55.64 which translated to a 10.5% loss. This is due to Saudi Arabia, the largest
member of OPEC announcing an increase in oil production thus increasing the supply of oil.
Additionally, this drop is also due to the Trump administration exempting 8 countries from the Iranian
sanctions, thus allowing for the further increase in the supply of oil and creating a surplus in the
market for oil.

Meanwhile, copper was up 5.6% over the past two weeks closing at 2.805. The possibility of more
sanctions from the trump administration also aided in the increase as future supplies could be
strongly affected. However, copper prices are expected to decrease as they have been doing over the
past year because Chilean miners are exploring new mines thus increasing its supply. Chile is the
world’s largest supplier of copper and this would affect the market for copper significantly. 

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Economic Updates
Date Country Event Actual Forecast Previous

18-11-18 United US durable goods orders –4.40% –2.00% –0.01%


States

United
19-11-18 States US Retail Sales 0.8% 0.5% 0.2%

20-11-18 China GDP first three quarters growth 6.7% 6.5% 6.9%

20-11-18 Canada Federal Debt-to-GDP Ratio 31.3% 30.4% 29.8%

21-11-18 United Existing Home Sales growth in 1.4% 1% –3.4%


States October

22-11-18 Canada Inflation Rate 2.4% 2.3% 2.2%

Overall, the total US durable goods orders dropped more than expected. This could be due to the
recent economic slowdown. However, US retail rates were up 0.8% beating forecasts thanks to the
1% increase in automotive sales. Moving onto China, the first 3 quarters of GDP growth was reported
at 6.7% suggesting that China is successfully maintaining their current growth levels. As for Canada,
the Federal Debt-to-GDP Ratio was reported higher than expected as the Liberal government vastly
increased the budget via the accumulation of debt. The Existing Home Sales growth beat their
expectations by 40% indicating a slight temporary increase in home prices over the next couple of
months. Finally, Canada’s inflation rate was reported at 2.4% beating its expectations of 2.3%. This
could indicate that the Bank of Canada might consider raising the overnight rate.

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Economic Calendar
Date Country Event Forecast Previous
27-11-18 Germany Import Price Index (YoY) 4.6% 4.4%

27-11-18 United States House Pricing Index (Mom) (Sep) 0.4% 0.3%

28-11-18 Eurozone/EU M3 Money Supply (YoY) (Oct) 3.5% 3.5%

28-11-18 United States GDP Annualized 3.5% 3.5%

29-11-18 Switzerland GDP (YoY) 3% 3.04%

30-11-18 Canada GDP Annualized (QoQ) 1.9% 2.9%

Earnings Calendar
Earning
Date Company Symbol EPS Estimate
Release Time
20-11-18 Target Corporation NYSE: TGT Before market open $1.39

28-11-18 Tiffany & Co. NYSE: TIF Before market open $1.62

13-12-18 Costco NASDAQ: COST After market close $1.45

18-12-18 FedEx NYSE: FDX After market close $3.04

19-12-18 General Mills Inc. NYSE: GIS Before market open $0.78

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
investment decisions.

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