The Week of October 7 – October 11, 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

• Canada September employment rose by 53,700. Fulltime jobs grew by 70,000; part-time fell 16,300. Interestingly, the gains are all in the public sector, which picked up 32,600. Private sector jobs actually shrank by 21,000. The unemployment rate fell to 5.5%. The ‘average hourly wage rate’ rose, but the ‘hours worked’ per week fell, leaving total earnings stagnant. The report is not as strong as the headlines might suggest.
• Canada August ‘new housing price index’ rose 0.1%. Toronto is unchanged for the month and down 1.3% y/y.
• Canada building permits rose 6.1%. Housing starts fell 2.5%. These are volatile series.
• U.S. September ‘producer price index’ fell 0.3%; core (excluding food and energy) also fell 0.3%.
• U.S. September ‘consumer price index’ unchanged, bringing the y/y rate from 1.8% to 1.7%. Core inflation rose 0.1%, keeping the y/y rate steady at 2.4%. Perhaps more importantly, ‘average weekly earnings’ slowed to 0.9% y/y, compared to 1.1% in August. ‘Real average hourly earnings’ also slowed to 1.2% y/y, August was revised down to 1.4%. Tepid income growth will keep inflation tame.
• U.S./China trade talks showed encouraging developments at press time. China is reportedly offering to scrap forced joint ventures in 2020. If that is true, it would be a big step in eliminating ‘forced technology transfer’ from foreign technology firms to their Chinese joint venture partners. This could also apply to financial services companies.
• Caixin China ‘services composite index’ (privatelyconducted survey) slid to 51.3 from 52.1 prior. There is some recovery in the labour market but the rising costs of materials and trade uncertainties continued to restrain business confidence.
• China foreign exchange reserves fell again in September, about 0.5%.
• Crude oil is up on an early Friday report about a Saudi attack on an Iranian tanker.