The Week of March 8 – March 12, 2021

Macro Update

• Last Wednesday, the Bank of Canada said it would hold current level of policy rate until inflation objective is sustainably achieved. It continues on with its quantitative easing program.
• Canada February unemployment rate fell to 8.2% from 9.4% in January. The economy added 259,200 jobs in February, compared to a loss of 212,800 in January. It is a very strong showing. ‘Average hourly wages’ +4.26% year over year, mostly due to widespread job losses still dominating the lower-paying service sectors. The ‘participation rate’ was steady at 64.7%.
• U.S. weekly jobless claims eased to 712,000 from 754,000 prior.
• U.S. February National Federation of Independent Businesses (“NFIB”) ‘small business optimism index’ edged up from 95.0 in January to 95.8 for February. The improvement is encouraging but it missed expectations. Small businesses are still struggling with the pandemic and the permanent damage it has inflicted on business owners and employees. 
• U.S. February ‘producer price index’ +2.8% year over year. Core PPI +0.2% month over month, +2.5% year over year.
• U.S. February ‘core consumer price index’ only rose 0.1% month over month, putting the year over year rate at 1.3%.
• In its policy-setting meeting last Thursday, European Central Bank (“ECB”) President Lagarde opened with, “Market rates pose risk to wider financing conditions.” German Bund yields fell after the ECB announced “significantly faster” bond purchases.
• ECB raised 2021 growth forecast for the Eurozone from 3.9% to 4.0%; inflation from 1.0% to 1.5%. Lagarde cited higher crude oil futures prices as the source.
• J&J’s one-shot COVID vaccine has been cleared for authorization in the EU.
• CNN – “Denmark, Iceland and Norway have suspended the use of the Oxford-AstraZeneca Covid-19 vaccine while the European Union’s medicines regulator investigates whether the shot could be linked to a number of reports of blood clots.”

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 12, 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.