The Week of January 20, 2020 – January 24, 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

• Bank of Canada kept its benchmark interest rate unchanged, citing recent softness in the economy, “The weaker data could signal the global economic conditions have been affecting the Canadian economy to a greater extent than predicted. Data for Canada indicates that growth in the near term will be weaker, and the output gap wider, than the Bank projected in October.” It also cuts GDP forecast for 2020 from 1.7% to 1.6%.
• The Federal Reserve Open Market Committee (FOMC) will make its interest rate decision on Wednesday. No change is the expected outcome. The new softened stance at the Bank of Canada should start to disadvantage the Canadian dollar, particularly against the U.S. dollar.
• Canada November retail sales rose 0.9%, after October was revised from a 1.2% drop to a 1.1% decline. The volatile auto sector rebounded and gained 3.8%, but electronics/appliances fell 19.9%. More importantly, core sales (sales excluding autos, gas station sales and building materials) fell 0.2% in November.
• Canada December consumer price index (CPI) eased to 2.2% y/y, versus 2.3% y/y prior. Core measures are mixed. Overall it is a slightly softer report.
• Canada December new housing price index rose 0.2%.
• Canada November manufacturing sales fell 0.6%. October was revised from a 0.7% loss to a 0.2% decline. The October revision took away most of the sting from the November release.
• China extended shutdowns in various public venues and means of transportation to contain the virus outbreak. The annual huge migration to visit families during Chinese New Year holidays lasting well past next week will be very much curtailed, hurting the economy. Crude oil is taking another hit.
• U.S. manufacturing purchasing managers’ index by Markit eased to 51.7 for January, from 52.4 in December, still in expansion territory. However, the Institute for Supply Management last clocked its version at 47.2, in contraction territory.
• Markit’s U.S. services purchasing managers’ index for January came in at 53.2, versus 52.8 in December.
• Eurozone consumer confidence index stayed at -8.1 for the second month in a row.