ETF Inflows Drive Canadian Markets Higher

Heavy ETF inflows drove the markets higher this past week , a portion of which was likely retail in nature. CA banking earnings will be keenly eyed later this week and will help drive direction.

What Happened:

  • Broad-based advances helped the TSX notch a 2.8% gain and arrest the heavy negative momentum. Volumes were light however and small caps outperformed.
  • Health Care was the only name to end in the red. Tech sharply outperformed w/ a 7% gain (its largest weekly gain since Dec'13), a +4% gain in Materials and Industrials helped support the advance.

Tech & Materials gains were predominantly driven by heavy ETF inflows .

  • Commodity prices were broadly higher, Oil +4% and Gold +3%.

Asset managers pared their longs on the C$ , speculative positions were unchanged.

  • CA ETF flows stabilized - with most sectors seeing some of their largest ETF inflows in at least 10 weeks . Broad market ETFs continued to see the greatest inflows, especially the U.S.-based MSCI CA ETF. Energy saw its sixth consecutive week of outflows.
  • U.S. ETF flows were also very positive - mostly driven by heavy flows into Financial and Tech ETFs. The S&P500 ETF saw its largest weekly inflow since Nov'16 (election) .

What's to Come:

  • 70% of the TSX constituents are in correction territory, TSX looking at the 15,600 level for the next line of resistance. DJIA back at its 50DMA, this was the level that triggered the initial sharp selloff.
  • CA economic calendar - retail trade and CPI data headline late in the week. The U.S. calendar is light , except for FOMC meeting minutes on Wednesday.
  • Earnings - Wednesday will see the heaviest number of releases, notable this week - MFI, MG, CM, L, RY, PPL.
  • Index - TSX index consultation on changes to rebalancing dates resulted in no changes (see attached).

CA vs U.S. Sector % Chg. From 52 Week High:

  • Weakness in resources has been the main cause of the recent underperformance vs the U.S.

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 . This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, "Nasdaq"), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.