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Canadian Market Update: TSX Saw New Highs Last Week

Index Rebalancing – TSX Preferred Share Index will undergo its quarterly rebalance on Jan 19th 2018, full list of changes available here >

4Q17 Canadian Year In Review now available here >

  • The TSX touched fresh all-time highs last week, gaining 1%, though the S&P advanced 2.6%. Volumes were elevated though the breadth of gains was shallower. Small caps underperformed.
  • Marijuana stocks once again propelled Health Care to outperform, +8.7%; these were supported by Materials,Tech, Energy and Financials.
  • Interest rate sensitive stocks underperformed –Utilities, Telco & REITs.
  • Commodities advanced broadly, Oil was up by nearly 2%, while Gold saw a 1% gain.
  • C$ gained 1.3% on the week following a better than expected employment report; HF shorts against the loonie are increasing, net short for the first time since July 2017 .
  • Earnings – some Telco/Media names are reporting this week – CJR, SJR and CCA.

CA economic calendar is light this week with just housing data to be released. In the U.S., the highlight will be CPI and retail sales data on Friday.

ETF – broad inflows into the CA ETF space helped move us to new highs last week, Financials, Utilities and bond ETFs were the only regions to see outflows. The U.S. S&P500 ETF saw its largest outflow since May2017 , assets rotated into EAFE and Emerging Markets mostly.

Shorts against TSX constituents dropped by 5% in the second half of December , partly due to a closing of end of year bets, though partly due to a continuation of a decrease in bearish sentiment against CA stocks.

Nasdaq Advisory Services Canadian Team Prab Sagoo
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