The Week of January 6, 2020 – January 10, 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

• U.S./Iran hostilities propelled crude oil prices higher early last week, but they staged an ugly bearish reversal and the benchmark West Texas Intermediate (WTI) fell below US$60.00 a barrel on Wednesday, from a high of above US$65.50. Global demand for oil in 2020 is seen as unimpressive in various industry reports.
• After a loss of 71,200 jobs in November, Statistics Canada found 35,200 job gains in December; of which, full-time jobs increased by 38,400, exactly offsetting the 38,400 full-time job loss in November! Part-time jobs fell 3,200, versus 32,800 lost in November. The unemployment rate fell from 5.9% in November to 5.6% in December. The participation rate fell by 0.1% to 65.5%. ‘Usual hours worked’ was unchanged.
• Canada IVEY purchasing managers’ index fell to 51.9 from 60.0 prior; it is a volatile series.
• Canada November exports fell 1.4%; imports fell 2.4%.
• U.S. December ‘nonfarm payrolls’ rose only 145,000. Cumulative two-month revision was a negative 14,000, adding to the disappointment. ‘Average hourly earnings’ rose 0.1%, although November was revised higher by 0.1% to 0.3%. On a y/y basis, wage growth slowed to 2.9% from 3.1%. ‘Average weekly hours’ were steady at 34.3 hours. The unemployment rate and the participation rate were steady at 3.5% and 63.2% respectively.
• U.S. November wholesale sales rose 1.5%. Inventories fell 0.1%. Rising sales chipping away at inventories is a nice change.
• U.S. December Institute for Supply Management (ISM) manufacturing purchasing managers’ index (PMI) fell to 47.2, a 10 ½ year low. U.S. services purchasing managers’ indices were generally stronger.
• U.S. November exports rose 0.7%; imports fell 1.0%.
• China December consumer price index was steady at 4.5% y/y, as pork prices fell. The producer price index fell 0.5% y/y, a smaller drop than the 1.4% y/y decline in November, but extending the painful downtrend. Excess capacity is the main reason and falling prices are hurting industry profits.