Effective November 27, 2021, the deferred sales charge and low load sales charge purchase options will no longer be available for purchase on Sun Life Global Investments mutual funds. Switches between funds of the same sales charge purchase option will be permitted.
A review of the week's top global economic and capital markets news.
For the week ending July 23, 2021
As of noon on Friday, global equities reversed sharp early-week losses and ended up gaining ground, with markets looking past the spread of the Delta variant of the coronavirus. Treasuries were volatile as well, with the yield on the 10-year note dipping as low as 1.16% on Monday July 19, 2021 before rebounding to 1.30% at the end of the week. Oil was skittish too, as the price of West Texas Intermediate crude fell below $66 before rebounding to end the week about where it began, at $71.60. After a rollercoaster week, volatility, as measured by the Cboe Volatility Index (VIX), ended little changed at 17.1.
The blistering pace of US growth may have likely peaked in the second quarter, but the expansion is potentially anticipated to continue into next year, according to a survey of economists conducted by the Wall Street Journal. Rapid gains in consumer spending, the main driver of US growth, have been bolstered by the widespread reopening of businesses, rising vaccination rates and heavy fiscal stimulus. So far, the spread of the Delta variant has not had a material impact on growth projections.
At the first European Central Bank (ECB) meeting since the bank's just-concluded policy framework review, the bank's president, Christine Lagarde, issued strong forward guidance that rates will remain at present or lower levels until the ECB sees "inflation reaching two per cent well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realized progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilizing at 2% over the medium term. This may also imply a transitory period in which inflation is moderately above target." With the US Federal Reserve expected to signal tapering of asset purchases later this year and the ECB on hold, the euro fell toward its lowest levels since the end of March, around $1.1760.
The British government this week called on the European Union (EU) to rewrite portions of the Brexit treaty that pertain to trade with Northern Ireland, a plea the EU rejected. The United Kingdom says the pact is hampering trade between Northern Ireland and the rest of the UK. Since a physical border between Ireland and Northern Ireland is prohibited by the Good Friday agreement, the existing protocol includes customs checks on goods moving across the Irish Sea to prevent UK products that do not meet EU regulatory standards from making their way into Ireland, an EU member state. While rejecting the notion of reopening the agreement, the EU said it is willing to discuss its problems.
US existing home sales rose 22.9% from a year earlier in June. The price of the median home sold rose 23.4% over the same period, to $363,300. Sales of homes worth over $1 million more than doubled last month compared with the year earlier. Inventories of unsold homes edged up in June but remain below typical levels. However, sentiment among builders of new homes fell to an 11-month low in June, due to elevated building materials costs and supply shortages.
A study published this week in the New England Journal of Medicine indicates that most of the vaccines used in developed markets are nearly as effective in combating the Delta variant as they are in the countering the Alpha variant, which was the predominant strain when the vaccines were first tested. The study shows that the effectiveness of two doses of the mRNA vaccines is about 88% while the effectiveness of two doses of the Oxford vaccine is about 67%.
Sources: MFS research, Wall Street Journal, Financial Times, Reuters, Bloomberg News, FactSet Research, CNBC.com.
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Information presented has been compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made with respect to its timeliness or accuracy. This commentary may contain forward-looking statements about the economy and/or markets; their future performance, strategies or prospects. Forward-looking statements are not guarantees of future performance, are speculative in nature and cannot be relied upon.
Sun Life Global Investments is a trade name of SLGI Asset Management Inc., Sun Life Assurance Company of Canada, and Sun Life Financial Trust Inc., all of which are members of the Sun Life group of companies.
SLGI Asset Management Inc. is the investment manager of the Sun Life family of mutual funds; Sun Life Assurance Company of Canada is the issuer of guaranteed insurance contracts including Annuities, and Segregated Funds. Sun Life Financial Trust Inc. is the issuer of Guaranteed Investment Certificates.
