Market Commentary

Making Cents of the Markets

New episode of Ready.Set.Retire! and the first episode of RSR to air on the Kelowna Radio AM1150! Jon and Lori are bringing it back to basics and talking about the 5 steps to a long, healthy, and happy retirement!

Listen here.

Listen to the latest Making Cents of the Markets on CKNW, where we discussed how Cryptocurrencies are affecting the market right now, and the latest in the BC real estate market. We finish by talking about how the pandemic has affected retirement savings.

Click to listen here.

 

Beyond the Markets

Canada’s largest Mobile Food Festival is coming to North Surrey for the first time ever! This weekend from 11am to 8pm join the Greater Vancouver Food Festival and see an amazing group of food trucks at North Surrey Secondary. This year the festival has adapted to be a drive through, so that you can enjoy your favourite food trucks and the beautiful outdoors. As always, admission is free!

 

Be in the Know

After digesting a very strong earnings season, North American markets continued to trade in a sideways fashion as investors look ahead to what is next. One of the hot topics over the past few months has been uncertainty about future inflation, and this week Canada reported a 3.4% increase for April. Much of the increase was the result of base-year effects relative to steep declines in prices last April, a large part of this being contributed to higher gasoline prices that were pressed a year ago. If these increases are temporary in nature, we expect the Bank of Canada to stay on its current course and keep interest rates low until 2023.

Outside of inflation, most news headlines this week focused on the cryptocurrency space, as Bitcoin and other cryptocurrencies plunged into a bear market declining over 30% in the past 2 weeks. The latest catalyst driving prices lower was Chinese authorities announcing their plan to introduce tighter regulations that will crackdown on Bitcoin mining and trading behaviours. We remain disciplined in our approach to avoid potential bubbles and do not hold any companies with exposure to the space that includes the likes of Tesla and Paypal. We want to assure investors that the bursting of this bubble has not affected equity markets, and in fact, this event may motivate crypto investors to rotate capital back into stocks.

Ahead of what we hope is a normal summer, we saw Canadian retail sales increase 3.6% in March which beat expectations due to higher sales for products such as building materials, gardening equipment, and clothing. We are pleased to see that the “first-dose” inoculation rate in Canada surpassed the US this week (49% vs. 48%) as we await the eventual re-opening of the US-Canadian border and international travel. We strongly believe that the re-opening will lead to increased spending and economic activity for years to come which drives our thesis for markets to only head higher in the future.

 

Our Strategy

As markets consolidate over the past few weeks, we were encouraged by the market’s apparent resilience because we believe that consolidations and even pullbacks are healthy for the sustainability of long-term uptrends. The trend of positive corporate profits and future expectations drive markets higher which are optimistic for markets in our view and reinforce our bullish stance, even in the face of any near-term volatility.

That being said, we were patient this week and did not add any new positions to our portfolios as we want to ensure that markets break out and confirm their skywards motions before doing so. The old adage “Sell in May and Go Away” has not been true so far this month, which is why we always rely on our discipline and never our emotions guide our investment decisions.

 

Visual of the Week

We look forward to hearing details behind the Restart British Columbia 2.0 plan on Tuesday as it is expected to be announced that restaurants will be once again opened for indoor dining. Go support your favourite local businesses!

The comments and opinions expressed in this newsletter are solely the work of Pinkowski Wealth Management, not an official publication of Canaccord Genuity Corp., and may differ from the opinion of Canaccord Genuity Corp’s. Research Department. Accordingly, they should not be considered as representative of Canaccord Genuity Corp’s. beliefs, opinions or recommendations. All information is given as of the date appearing in this newsletter, is for general information only, does not constitute legal or tax advice, and the author Pinkowski Wealth Management does not assume any obligation to update it or to advise on further developments related. All information included herein has been compiled from sources believed to be reliable, but its accuracy and completeness is not guaranteed, nor in providing it do the author or Canaccord Genuity Corp. assume any liability.

CANACCORD GENUITY WEALTH MANAGEMENT IS A DIVISION OF CANACCORD GENUITY CORP., MEMBER-CANADIAN INVESTOR PROTECTION FUND AND THE INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA