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Canadian Markets Await Index Rebalance, CPI/Retail Data and OPEC Meeting

We will see a packed Friday – index rebalance, CPI/retail data, OPEC meeting.

The TSX’s somewhat cautious run to the 16,300 level has now made it the 13th best performing developed market index YTD.

What's to Come:

  • Technicals – TSX now
  • Earnings – just BlackBerry reporting this week.
  • CA economic calendar – light though we will be seeing retail trade and CPI on Friday. The U.S. has an equally light calendar with just housing predominantly on the cards.
  • Index – annual Russell rebalance on July 22nd – elevated volumes and block trades to be expected (CA additions/deletions minimal).
  • OPEC meeting on Friday, output increase expected.
  • German politics – Merkel’s coalition under pressure on immigration.

What Happened:

  • The TSX rose by a slight 0.7% during the week, outperforming the flat S&P500. Volumes were heavy (index rebalance/quad witching) though breadth was not outstanding.
  • Gains were led by large and mid cap names, small caps underperformed.
  • Gains were broad on the sector level, led by Consumer and Tech names.
  • Energy was the sole name in the red, however, both Materials and Financials had more losers than winners.
  • C$ - lost a notable 2% vs US$, though speculative shorts continue to gradually diminish, while speculative shorts against US$ are at their highest since early Dec .
  • Commodities – universally lower b/w 1%-2% on a stronger US$.
  • CA ETF Flows – broad inflows, though Energy and Financial ETFs saw outflows, U.S. investors reduced CA exposure and Canadians moved out of CA large caps and into the S&P500.
  • U.S. ETF Flows -- consumer ETFs continue to see notable inflows (helping sector performance), w/ Financials, Industrials, Tech and broad benchmark ETFs all seeing outflows.
Canadian Market Update June 18 2018

Nasdaq Advisory Services Canadian Team Prab Sagoo
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