The Week of May 17 – May 21, 2021

Macro Update

• Canada April Consumer Price Index (“CPI”) +0.5% month over month, versus also +0.5% month over month in March. April CPI +3.4% year over year, up from +2.2% year over year in March. According to Statistics Canada, a significant proportion of the year over year increase was attributable to a steep decline in prices in April 2020, when CPI fell 0.2% year over year. April core CPI +0.7% month over month, versus +0.1% month over month in March. April core CPI +2.3% year over year, versus +1.4% year over year in March.
• Canada March retail sales +3.6% month over month, versus +4.8% month over month in February. Excluding autos, March retail sales +4.3%, versus +4.8% month over month in February. Statistics Canada published an advance estimate for a 5.1% decline in retail sales in April.
• After similar reports from the Federal Reserve and the European Central Bank, the Bank of Canada published its own report regarding risks in the financial system and the economy. From its website, “The Financial System Review explains how financial vulnerabilities in Canada have evolved over the past year. Household vulnerabilities have intensified. Heightened vulnerabilities: Market liquidity and climate change”. The Canadian government responded by tightening up mortgage rules regarding affordability.
• U.S. April housing starts -9.5% month over month, vs +19.8% month over month in March. Building permits +0.3% month over month vs +1.7% month over month in March. Soaring lumber prices had been cited as headwinds.
• Eurozone April CPI +0.6% month over month, vs +0.9% month over month in March. Core CPI +0.5% month over month, vs +0.6% month over month in March
• Eurozone Q1 Gross Domestic Product (“GDP”) -0.6% quarter over quarter; -1.8% year over year.
• Reuters – ‘China will strengthen its management of commodity supply and demand to curb “unreasonable” increases in prices and prevent them being passed on to consumers, the country’s cabinet said on Wednesday.’ Commodity prices only staged a brief correction.
• Tensions escalated between U.S. and China, as U.S. allies joined in. POLITICO – “European Parliament to vote on freezing China deal. Draft seen by POLITICO calls on EU to work with US on China, and to plan deals with Taiwan.”

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 May 21, 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.