Current Market Review

The TSX Composite index was down 1.2% year-to-date as of Sep 14, 2018, but the S&P500 is up 13.1% in Cdn dollars for the same period.

The “recession watch indicator” i.e. the spread between the 2-yr and 10-yr Treasury notes of Canada and the US stood at 25 basis points Cda and 38 points US. (i.e based on current yields 1.75% / 2.0% Cda and 2.38% / 2.75% US). Both are positive, so for now all ok. (When the yield curve inverts a recession usually results a short time later.)

Oil now sits at $69 a barrel. Our TSX and S&P arrows are up. Our third arrow based on seasonality could have turned down Apr 20 but remains up.

In the US, Trump has instructed aides to proceed with tariffs on about $200 billion more in Chinese products despite his Treasury secretary’s attempt to restart talks with Beijing to resolve the trade war. Trump has also apparently decided that NAFTA will be renamed USMC – for U.S., Mexico and Canada – and is threatening to drop the C if Ottawa doesn’t offer significant concessions.

Market Trend

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Ultimate Funds

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