The Week of October 28 – November 1, 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

• The Bank of Canada kept its benchmark interest rate unchanged this past Wednesday.
• Canada August GDP rose 0.1%, after a flat July. On a y/y basis, GDP grew by 1.3%.
• The U.S. October employment report showed a betterthan-expected increase of 128,000 for ‘nonfarm payrolls’, despite an estimated 46,000 decrease from GM strikes. There is also a large upward cumulative revision to August and September of 95,000. ‘Average hourly earnings’ rose 0.3%, which is better than recent releases but still tame. The ‘average work week’ is unchanged at 34.4 hours so there is little wage and pipeline hiring pressures. As such, this report is unlikely to move the needle at the Fed, despite the strength in hiring, which is a lagging indicator. The unemployment rate rose 0.1% to 3.6% but that was matched by a 0.1% increase in the ‘labour force participation rate’ to 63.3%.
• U.S. October ISM (“Institute for Supply Management”) manufacturing index improved from 47.8 in September to 48.3, but still in contraction.
• U.S. September personal income rose 0.3%. Personal spending rose 0.2%.
• The Fed’s favourite inflation gauge – ‘Core Personal Consumption Expenditure Price Deflator’ came in flat in September, the y/y rate eased from 1.8% in August to 1.7%.
• U.S. Q3 GDP rose 1.9% annualized; against a 2.0% annualized gain in Q2.
• Eurozone September unemployment rate steady at 7.5%. Consumer price index 0.7% y/y.
• Eurozone business climate index improved from -0.23 to -0.19. Consumer confidence index deteriorated from -6.5 to -7.6. Both still mired in negative territory.
• In a rare divergence, the privately-run Caixin manufacturing purchasing managers’ index for China rose to 51.7 from 51.4. The ‘official’ manufacturing purchasing managers’ survey was a much weaker 49.3.
• China September ‘industrial profits’ fell 5.3%; after a drop of 2.0% in August; both on a y/y basis.