The Week of April 12 – April 16, 2021

Macro Update

• Released last Monday, the Bank of Canada’s quarterly ‘Business Outlook Survey Index’ improved to 2.87 in Q1 2021, from 1.29 in Q4 2020. However, the survey period was from mid-February to early March, before the recent surge in case counts.
• CTV News reported last Friday – “Ontario has logged more than 4,800 new COVID-19 cases for the first time in the pandemic, breaking a record for the most daily infections for a second day in a row.“
• The surging case counts in Canada has yet to impact the Canadian dollar. The new Canadian Federal Budget is expected to incur huge deficits, but, within the context of the pandemic, will likely have limited, if any, impact on the Canadian dollar.
• Canada February ‘manufacturing sales’ -1.6% month over month, versus +3.1% in January.
• U.S. March industrial production +1.4% month over month, versus -2.6% in February; it is still materially below pre-pandemic levels. Capacity utilization recovered to 74.4% in March, versus 73.4% in February. The average reading for a healthy economy is roughly 81.0%.
• U.S. March retail sales surged to +9.8% month over month, after a -2.7% in February. The ‘control group’ (‘retail sales excluding autos, gas stations and building materials’, which goes into GDP calculation as ‘personal consumption expenditures’) +6.9% month over month versus -3.4% in February. A very strong report as pent-up demand was unleashed.
• U.S. March Consumer Price Index (“CPI”) +0.6% month over month, versus +0.4% in February. Core CPI (excluding food and energy) +0.3% month over month, versus +0.1% in February.
• National Association of Home Builders (“NAHB”) U.S. housing market index rose to 83, from 82 prior.
• U.S. March housing starts +19.4% month over month; versus -11.3% in February. Building permits +2.7% month over month, versus -8.8% in February. After a brief spell of softness, the U.S. housing market is back.
• Eurozone March CPI +0.9% month over month; versus +0.2% in February.
• As the Eurozone grapples with problems from vaccines and the spreading of variants, economic forecasts are being rolled back.

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 North American Fund (formerly 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.

All data is sourced from Thompson Reuters and Capital IQ as of April 16, 2021 unless otherwise indicated. While believed to be reliable, the accuracy of the information cannot be guaranteed. Caldwell Investment Management Ltd. and its affiliates make no representations or warranty as to its completeness, reliability or accuracy.

Investment involves risk, uncertainty and assumptions. The value of investments rise and fall such that there is a risk you may not recoup your original investment. Past performance is not a reliable indicator of future performance.

The views expressed herein of those of the portfolio manager and not necessarily those of CIM. Such views, while based on current market conditions and information, are subject to change without notice such that there can be no assurance that actual results will not differ materially from such expectations. The views expressed are an illustration of broader themes and intended to be for general information purposes only. They should not be relied upon nor construed as investment advice. Readers are expected to consult with their investment advisor for advice specific to their circumstances before making investment decisions.

Forward-looking statements are not guarantees of future results as they involve uncertainties and assumptions; there can be no assurance that actual results will not differ materially from expectations.