Interesting chart from LPL Research shows the S&P500 has gone 66 (now 68) days without a decline of 1% or more. This is now the longest streak of days without a 1% decline in the current bull market and it beats the last streak set in 2014.
Not much new from the Bank of Canada which kept interest rates steady at 0.50% at today’s policy meeting. The Bank revised US growth higher due to the proposed tax policies in the US but noted that uncertainty remains around these policies. Typically US stimulus would be a boost to Canadian GDP however the potential for a border adjustability tax and Trump’s position on NAFTA renegotiations would hurt Canada’s economy.
Bank of America Merrill Lynch released the results of its global fund manager survey for January which showed long US dollars was by far considered the most crowded trade. Almost half of the survey participants (47%) viewed long USD as crowded and the next most crowded trade was seen a short government bonds, see below:
When the year starts with a positive performing market in January investment returns for the year tend to skew to the upside. When January is positive the market averages a 16.8% return with positive returns 93% of the time. When January is negative the average annual loss is 11.2% with a positive outcome just 22% of the time.
While Toronto house prices gained 1.2% in December, Vancouver on the other hand continues to deflate as house prices fell 0.8% in December, see below. This is the third consecutive month of price declines in Vancouver and consistent with falling sales. Although sales peaked in February the BC foreign buyers’ tax implemented in August has had a major impact accelerating the decline in house prices.
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