The Week of March 1 – March 5, 2021

Macro Update

• Eurozone February purchasing managers’ indices (“PMIs”) showed a slight improvement from January. Canada’s PMI also improved modestly. China’s PMIs slipped, although still slightly in expansion mode. U.S. PMIs were stronger due to ‘new orders’ and higher ‘prices paid’ sub-components, mostly due to supply chain disruptions.
• U.S. February unemployment rate eased to 6.2% from 6.3% in January. ‘Nonfarm payrolls’ increased by 379,000, much larger-than-expected. ‘Average hourly earnings’ +0.2% month over month, compared to +0.1% in January.
• President Daly of the Federal Reserve branch in San Francisco estimated a full job market recovery to take at least a year or two after the U.S. is fully vaccinated. Canada will publish its employment report this Friday, March 12.
• The Federal Reserve’s Beige Book (a survey of all regional Fed districts) revealed that economic activity expanded modestly from January to mid-February. Reports on consumer spending and auto sales were mixed. Separately, Federal Reserve Chair Powell noted “disinflationary pressures not going to go away quickly.”
• The U.S. Congress is widely expected to pass the US$1.9 trillion virus relief bill this week.
• WSJ – “The U.S. will be able to vaccinate its entire adult population by the end of May, according to President Biden, bringing the target forward by two months.” Reportedly, this was due to the Administration who brought Merck onto the manufacturing of vaccines.
• U.S. Centers for Disease Control and Prevention (“CDC”) Director Dr. Rochelle Walensky said she is “really worried about more states rolling back public health measures… At this level of cases, with variants spreading, we stand to completely lose the hard-earned ground we have gained.”
• Canada December Gross Domestic Product (“GDP”) +0.1%, compared to +0.8% in November. Total activity is 3% below pre-pandemic levels. Retail trade was -3.3% due to a much earlier start in holiday shopping in anticipation of lockdowns. January GDP flash estimate was +0.5%.
• Canada Q4 labour productivity -2.0%, compared to -10.6% in Q3.
• Canada January imports +0.9%; exports +8.0%.
• Eurozone February core consumer price index (“CPI”) slowed to 1.1% year over year, from 1.4% year over year in January.

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 March 5, 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.