Hobbes: What’s the point of attaching a number to everything you do?
Calvin: If your numbers go up, it means you’re having more fun.
— Bill Watterson, Calvin and Hobbes (first published on November 18, 1985)
39 years ago, Calvin found Hobbes. Bill Waterson’s comic strip explored complex philosophical topics and life challenges through the eyes of a six-year-old boy (Calvin) and his stuffed animal tiger (Hobbes). A firm favorite with grown-ups and children alike, the original comics are today highly prized by collectors; an original print sold at a 2012 auction for a record-breaking $203,150. Stuffed with data and ready to accompany you on your adventures, here is your daily dashboard.
- Despite closing above 6,000 for the first time ever last Monday, the S&P 500® had its worst week since the first week of September, down 2.0%. Financials continued to gain ground despite the sell-off, up 1.4%, while worst-hit Health Care plunged 5.5%.
- The weakness in Health Care was not driven by earning announcements; rather, it was President-elect Donald Trump’s nomination of prominent vaccine sceptic Robert F. Kennedy Jr. to Secretary of Health and Human Services that sent the sector into a tailspin. Biotech firms bore the brunt of the damage: S&P Composite 1500 Biotech had its worst week since February 2009, down 12.7%, and is by far the worst performing S&P Composite 1500 industry this month.
- Outside the U.S., the vast majority of equity markets were also in the red last week with Turkey the brightest among the few bright spots with a 2.4% gain. At the bottom of the leaderboard, Korea was the weakest S&P Global BMI region, down 6.4%, but China was not much better off with a 6.0% drop.
- While some of China’s losses may stem from fears about the consequences of a U.S. - China trade war, some of the weakness in local equities are likely home grown: investors had hoped for decisive fiscal steps after a legislative meeting on November 8th, but the plans unveiled by the finance ministry included no new measures that would help defeat deflation. Chinese 10-year bond yields declined last week in response, while those in the U.S. surged 14 points. As a result, the U.S. - China 10Y yield spread widened further and is up over 80 basis points since the beginning of October, nearing its record level seen in April this year.
- Coming up this week: plenty of macro data will hit the wires; among the most important will be Friday's purchasing manager indices from the U.S., the U.K., Japan, and the EU, which will give indications about the economy overall as well as the labor market and firms’ pricing power. On the corporate earnings front, one of the most closely watched companies, Nvidia, will report results after Wednesday’s close.
- And finally, happy birthday to the S&P/TSX SmallCap Select! The index was included as part of a global series aimed at creating diversified benchmarks for smaller, profitable companies. It’s been five years since S&P DJI expanded the family to include Canada, launching the S&P/TSX SmallCap Select Index, which has generated an annualized total return of 10.4% in CAD since inception.
