WHAT HAPPENED:
- The TSX lost 1.6%, unable to hold the technically significant 15,600 level; outperformed a 2% loss in the S&P500.
- Volumes were elevated and Small Caps underperformed though losses were broad-based.
- CA Tech continues to surge (heavy ETF support), a 1.2% gain took the sector to a ~12% YTD gain. Defensive Staples and Utilities also gained.
- Losses in Energy, Materials and Financials were the greatest weights.
- Oil lost 3.6% (shorts continue to decrease against it),precious metals were also lower – mostly on US$ strength.
- C$ ended down by 1.9% (asset managers continue to pull back long exposure), sitting at $0.77 support.
- CA ETF Flows – broader market ETF’s saw outflows,TSX60 ETF saw its largest outflow since the end of 2017, bond ETFs benefitting, Energy ETF saw an 8th consec. week of outflows.
- U.S. ETF Flows – Tech and bond ETFs the only ones to see positive flows.
WHAT’S TO COME:
- Bank of Canada – announcing on Wednesday, no change expected.
- Technicals – further weakness could push the TSX down to 15,200 and then 15,000 supports.
- >2/3 of the TSX is in correction territory, 1/3 is in a bear market.
- Economic calendar – employment report on Friday headlining; likewise, the U.S. nonfarm payrolls data is also out on Friday.
- Earnings – earnings season slowing w/ smaller names mostly coming up, the most notable being – DSG, LNR, TOY, FNV.
- # of CA proxy contests consistent in 2017, but it was the first time since 2014 that dissidents won more contests than management: https://www.irmagazine.com/articles/activism/29470/canadian-dissident-investors-had-successful-2017-study-says
CA ETF flow action has been driving YTD performance domestically:
Nasdaq Advisory Services Canadian Team is part of Nasdaq's Corporate Solutions Advisory Services -- the most experienced team in the industry. The team delivers unmatched shareholder analysis, a comprehensive view of trading and investor activity, and insights into how best to manage investor relations outreach efforts. For questions about the Canadian market, please contact Prab Sagoo.
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