The Week of November 11 – November 15, 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

• Federal Reserve Chair Powell’s 2-day testimony to Congress on monetary policy and the economy did not move markets, his statements were all as expected and similar to prior communications.
• U.S. October retail sales rose 0.3%. A better gauge of underlying consumer behaviour, the Control Group (sales excluding autos, gas stations and building materials – the ‘personal consumption expenditure’ item in GDP calculations), rose 0.3%, but September was revised down from flat to a 0.1% decline.
• U.S. October consumer price index (“CPI”) rose 0.4%. Core CPI rose 0.2%. ‘Real average weekly earnings’ slipped to 0.9% from 1.0% in September on a y/y basis. Wage pressures remain tame.
• U.S. October core producer price index (“PPI”) – excluding food, energy and trade – rose only 0.1%. The y/y rate slowed from 1.7% in September to 1.5%. This will pressure consumer price inflation lower going forward.
• U.S. October industrial production fell 0.8%. Manufacturing production fell 0.6%. Automobile categories fell over 7.0%, mostly due to the GM strikes. Capacity utilization fell to 76.7, from 77.5 in September. GM strike might also be a factor here, but the drop still seems unusually large.
• Economists surveyed by Bloomberg expect the Canadian economy to decelerate to a yearly pace of 1.5% in 2019 and 2020.
• Canada September new home price index rose 0.2%; August was up 0.1%.
• Canadian insolvencies increase 8.4% over past 12 months to September. A report from the federal government’s Office of the Superintendent of Bankruptcy revealed that the number of consumer insolvencies increased by 8.5% over the past 12 months to September; the fastest rate in a decade. Business insolvencies increased by 4.1% in the same period; the first increase since 2001.
• China October industrial production grew 4.7%, a big miss. September was 5.8%. Retail sales grew 7.2%, another big miss. September was 7.8%. Auto sales fell 5.8%.
• Germany Q3 GDP rose 0.1%, so no recession in the technical sense. However, Q2 was revised lower from a 0.1% decline to a 0.2% drop.