The Week of February 10, 2020 – February 14, 2020

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

• Federal Reserve Chair Powell delivered its semi-annual testimony on monetary policy to Congress this past week. He indicated he would deploy quantitative easing to combat any down turn if necessary.
• U.S. January consumer price index (“CPI”) rose 0.1% m/m; excluding food and energy, CPI rose 0.2% m/m. ‘Real average weekly earnings’ increased 0.1% m/m. ‘Real average hourly earnings’ increased 0.6%, seasonally adjusted, from January 2019 to January 2020. Combined with a 0.6% decrease in the ‘average workweek’, ‘real average weekly earnings’ are flat over this period.
• U.S. January retail sales rose a meagre 0.3%. The ‘Control Group’ (retails sales excluding sales from autos, gas stations and building materials) came in flat for the month; December was revised lower from a 0.5% gain to just 0.2%; overall a disappointing report. Combining the CPI and retail sales report, it is highly plausible that consumer spending decelerated as household income failed to grow.
• U.S. January industrial production fell 0.3%. Manufacturing production fell 0.1%. Capacity utilization fell from 77.1% to 76.8%. Boeing was blamed for the miss.
• Canada January existing home sales fell 2.9%, after a 0.9% drop prior; housing starts rose 8.8%.
• Finances at Canadian households deteriorated again. According to new figures from the Office of the Superintendent of Bankruptcy: “Consumer insolvencies rose by 9.5 per cent in 2019 to the second-highest total on record.”
• OPEC cut its forecast for oil demand growth this year, citing China’s coronavirus outbreak as the “major factor” behind its decision. It revised its outlook for global oil demand growth in 2020 lower by 18.8%.
• Eurozone Q4 GDP grew 0.1% q/q; 0.9% y/y. Germany was flat. December industrial production plunged 2.1% m/m. November’s 0.2% gain was wiped out by revision. This came after Germany reported a 3.5% m/m drop for December.