The Week of December 9 – December 13, 2019

William Chin, MBA

Portfolio Manager & Chief Technical Analyst

William Chin, Chief Technical Analyst for Caldwell Investment Management Ltd. (“Caldwell”), is the lead Portfolio Manager on the Tactical Sovereign Bond Fund and Portfolio Manager for the fixed income portion of the Caldwell Balanced Fund. He also advises fixed income portfolios for affiliate Caldwell Securities Ltd.’s separately managed account platform and contributes to the Caldwell Investment Management Ltd. team’s research, specializing in macro-economics, currency risk management and technical analysis. William is a member of Caldwell’s Investment Risk Committee.
William has over 35 years of international investment experience in the areas of portfolio, currency risk and treasury management. He began his career in the currency market, progressing to the role of treasury manager for a large international bank. He was first registered as a Portfolio Manager with the Ontario Securities Commission in 1999 and managed high net worth client portfolios on a discretionary basis prior to joining Caldwell.
William has an MBA in economics and international finance. He has been a volunteer and a board member for the Canadian Society of Technical Analysts since 2001 and is their former President (2012-2014).
William is a frequent speaker on macro analysis, monetary policy and technical analysis.

Macro Update

• This past Wednesday, Bank of Canada made no change to monetary policy, citing ‘intact’ global recovery while the domestic economy was characterized as being ‘resilient’. Canada continues to have the highest policy rate among advanced economies. Stephen Poloz, the Governor of the Bank of Canada, will not seek a second term after his term expires on June 2, 2020.
• In Friday’s release, Canada’s unemployment rate for November jumped to 5.9%, from 5.5% in October. 71,000 jobs were lost (almost evenly split between fulltime and part-time). The private sector lost 50,000 jobs, while the public sector lost 2,300 jobs. Self-employment was down by 18,700. Declines were widespread across sectors. ‘Average hourly wage rate’ rose by 0.25%, but ‘usual hours worked’ (weekly) fell by 0.1 hour.
• This report – the Labour Force Survey (household survey) – brings the job picture closer to the Survey of Employment, Payroll and Hours (establishment survey), which, prior to this November report, showed roughly 100,000 fewer jobs created than the Labour Force Survey.
• Canada Q3 labour productivity rose 0.2%; Q2 was revised lower from a 0.2% gain to 0.1%.
• Canada October imports rose 0.5%, exports rose by 0.8%. Exports to China plunged 19.3%.
• Canada manufacturing purchasing managers’ index edged higher to 51.4 from 51.2 prior.
• U.S. November ‘nonfarm payrolls’ rose by a strong 266,000, with the return of the GM workers from strike. Cumulative 2-month revision was a positive 41,000, adding to the strength in the report. ‘Average weekly hours’ was unchanged at 34.4 hours. ‘Average hourly earnings’ rose 0.2%, wage pressure is still tame. The unemployment rate fell 0.1% to 3.5% but that was at the expense of a 0.1% drop in the ‘Participation Rate’ to 63.2%. Interestingly, the strength in this report is at odds with other surveys of the labour market.
• U.S. October imports fell 1.7%; exports fell 0.2%. Imports from China fell 4.8%; exports to China tumbled 17.0% to the lowest level in almost a year.