The Week of May 3 – May 7, 2021

Macro Update

• U.S. April ‘nonfarm payrolls’ +266,000, a big miss versus expectations of around 1,000,000 gains. March was also revised lower by 146,000. The significantly weaker-than-expected report sent the U.S. dollar crashing in currency markets. Other observers pointed to the almost a million job gains if the seasonal factors were removed. (The Bureau of Labour Statistics revised April numbers lower by a seasonal factor to offset seasonal hiring in anticipation of summer travel and vacation season). The unemployment rate rose to 6.1% from 6.0% in March, but the ‘labour force participation rate’ improved by 0.2% to 61.7%. ‘Average hourly earnings’ +0.7% month over month, which seemed odd as job gains were in service sectors with generally lower wages.
• Canada lost 207,100 jobs in April as lockdowns were imposed across many provinces; a setback after the gain of 303,100 jobs in March. The unemployment rate rose to 8.1%, from 7.5% in March. The currency market seemed to have ignored the report.
• U.S. latest weekly jobless claims eased to 498,000 versus 590,000 prior.
• U.S. April Institute for Supply Management (“ISM”) factory gauge eased to 60.7 versus 64.7 in March. The ‘prices paid’ index soared to 89.6, versus 85.6 in March. The services ‘Purchasing Managers Index’ (“PMI”) eased to 62.7 versus 63.7 in March.
• U.S. April Markit ‘Purchasing Managers Composite Index’ (“PMI”) came in at 63.5, versus 62.2 in March.
• U.S. Q1 ‘nonfarm productivity’ +5.4% versus -3.8% in Q4, a healthy recovery; ‘unit labour cost’ -0.3% versus +5.6% in Q4.
• Canada April Ivey Purchasing Managers Index (“PMI”) eased to 59.9 from 67.3 in March.
• Canada March imports +5.5%; exports +0.3%.
• Eurozone April Markit ‘Purchasing Managers Composite Index’ (“PMI”) came in at 53.8, versus 53.7 in March.
• U.S./China tensions escalated as allies joined initiatives from the U.S. BNN Bloomberg – “The Group of Seven nations is considering a U.S. proposal to counter what the White House sees as China’s economic coercion.” Bloomberg – “Top diplomats from the Group of Seven nations singled out China in a number of ways that will irritate the government in Beijing, from alleged human-rights abuses to its actions on Taiwan and incursions in cyber space.”

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 7, 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.