GLC Asset Management Group's Market Matters monthly investment commentary

GLC Market Matters

GLC Asset Management Group’s Market Matters monthly investment commentary is presented only as a general source of information and is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax or legal advice. Prospective investors should review the offering documents relating to any investment carefully before making an investment decision and should ask DLD Financial for advice based on their specific circumstances.
August 2016 Highlights

  • It was a tepid month for capital markets. Trading volumes were low, as were volatility measures.
  • Canadian equity momentum remained positive (just barely), but saw a significant shift, rotating from a resource sector-driven market in the first half of the year, to a non-resource sector-driven market thus far in the second half of the year.
  • US equity indices hit the trifecta of record highs. The S&P500, Dow Jones Industrial Average, and the NASDAQ all hit record highs on the same day (August 15) for the first time since 1999.
  • Canadian bond markets experienced mixed performance across the bond market credit segments and across maturity dates. Arated corporate bonds led the seven major credit segments, and long-term bonds outpaced short and mid-term bonds.
  • Corporate bond spreads tightened in August, inspired by a robust pace of new issues (the second busiest August on record); movement into corporate bonds from the plentiful cash sitting on the sidelines; and investors’ growing comfort with risk driving appetite for bonds with higher relative yield.
  • Global central banks continue to move in different directions. The Canadian and American central banks remained on hold, while Britain, Australia and Japan’s central banks announced a combination of rate cuts and/or further stimulus. Of note, the Bank of England reduced its rates for the first time since 2009, moving from 0.50% to 0.25% – a 322-year record low.
  • The Chinese government announced another step toward market liberalization through the Shenzhen-Hong Kong Stock Connect Plan. This significantly increases the number of stocks available to foreign investors, and notably creating greater access to China’s
    IT sector.