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 BMO Equal Weight REITs Index ETF (ZRE.TO) & Lumber Continuous Contract (LB.F)

Coming out of a very strong November which saw significant surges across equity and commodity markets, and new all time highs for major US indices including the Dow Jones Industrial Average achieving 30,000 for the first time, the start of December has been muted.

Equities and commodities have paused this week, as markets which had run up on anticipation of several developments, digest corporate/industry news and valuations. For example, the positive impact of new vaccine developments, including the approval of Pfizer’s vaccine in the UK has been fading. Action in US retailers has been mixed following Black Friday / Cyber Monday which showed a decisive shift from in-store to online shopping with deals now spread out over several days to weeks. Canadian bank earnings have come in stronger than expected driven by particularly good results from markets/wealth management related businesses and smaller loan loss provisions.Economic news out of the US has been mixed this week with construction spending and ISM new orders beating expectations, but ADP payrolls and the ISM Manufacturing PMI report disappointing and suggesting slowing growth. Service PMI reports are out today and then tomorrow US nonfarm payrolls and the Canadian Labour Force Survey cap off the week.

With earnings season now pretty much over and economic news winding down after this week, political negotiations have moved back into the spotlight. This week negotiations among OPEC+ oil producing countries over whether to extend supply cuts or slow production increases previously scheduled for January have been at an impasse and could potentially impact energy markets in the coming days. Also, after weeks of languishing around the US election, economic stimulus and government funding talks have gotten back underway in earnest this week with a Friday December 11th deadline looming to avert a government shutdown.

In this week’s issue of Equity Leaders Weekly, we take a look at the emerging recovery in real estate stocks as an example of previously lagging sectors starting to catch up and at lumber as an example of renewed interest in industrial commodities.

BMO Equal Weight REITs Index ETF (ZRE.TO) 

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