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February 12 , 2018
Statistic of the Week: 
Graduate students make up only 14% of pupils enrolled in higher education. However, this relatively small group of students have a disproportionately large portion of the $1.19 trillion in total student debt: a whopping 40%.
Global Perspective: 
Canada’s economy has officially entered a recession after GDP growth shrank during the first half of the year. Declining commodity prices, specifically oil, have caused the nation’s companies to slash investment and output to fall. Canada is the US’s largest trading partner.
Market Moving Events: 
Monday: US Markets Closed Wednesday: JOLTS Thursday: Jobless Claims, Import Export Prices Friday: PPI, Consumer Sentiment, Treasury Budget
It was an ugly week in the equity markets, as the S&P 500 retreated 3.36% and the DJIA fell 3.20%.1 Year-to-date performance is certainly lackluster, with the S&P down in excess of 5% and the Dow down greater than 8%.2 International markets faired similarly, with the MSCI EAFE pulling back 3.79% on the week, and posting year-to-date performance of -3.63%.3 With that type of bloodletting in the equity markets, one would have expected better relative performance out of “safe haven” assets like Treasuries. However, the yield on the 10-year fell slightly, ending the week at 2.13%.4 Many believe the reason Treasury bond prices have been falling as equity volatility has increased is because China appears to be selling Treasuries in an effort to add liquidity to their own system - causing pricing pressure. With the Chinese markets having been closed last Thursday and Friday, investors had the opportunity to look at global markets without the distraction of China’s woes – it did not seem to help. This week, market participants will be looking to challenge the assertion that market volatility was unusually high because the buyers had been on vacation. The week ahead is very light in terms of economic data points. Chatter and speculation over central bank policy and geopolitical news events are likely to be main market drivers along with investor skepticism as the market searches for a bottom.
Chart of the Week: 
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