Market Commentary

Making Cents of the Markets

We’ll be back again next week for Making Cents of the Markets on CKNW to talk about markets, the economy, and more!

Beyond the Markets

Downtown Vancouver is blooming with beautiful floral art displays in support of breast cancer research this month. Floral enthusiasts can even stroll through a trail of over 50 pop-up installations created by Vancouver’s top floral artists from June 11 to 20.

Fleurs de Villes ROSÉ, the organizer of the event, is donating 10 percent of all sponsorship fees raised from the global ROSÉ tour to the Breast Cancer Society of Canada (BCSC) and the Breast Cancer Research Foundation. Visitors can also purchase flowers on June 13 from fresh pop-up flower shops along the trail with partial proceeds going towards breast cancer research.

Be in the Know

Markets sprang into June on a strong note with global equities heading higher due to optimism around most major economies re-opening, while fears that central banks would increase interest rates dissipated after Friday’s jobs report came below analyst expectations. The Organization for Economic Co-operation and Development (OECD) released their latest quarterly report and stated that they expect the global economy to grow by 5.8% this year, which is the fastest pace in almost half a century. Improving vaccination programs was the main reason behind these upgraded forecasts with Canada now among the top countries for the first dose of vaccinations, an impressive improvement since when the vaccine rollout first began.

Canadian employment fell by 68,000 jobs in May, which was unexpected and did not please investors seeing how the unemployment rate remained at 8.2%. The silver lining was that most of these jobs lost were part-time and were driven by stay-at-home orders in Ontario and Nova Scotia which have now been lifted. The US economy added 559,000 jobs in May as their unemployment rate dropped to 5.8%, with most job gains coming from the leisure and hospitality sectors. The good news for the market was that the economy is progressing in the right direction while not surging in a manner to motivate the Federal Reserve to raise interest rates.

Despite some temporary weakness, Canada is clearly moving in a positive motion with the economy expanding at a 5.6% annual rate in the first quarter of the year. Favourable mortgage rates, government support, and an improved labour market continued to support housing investment and consumer spending. We remain confident that our economy will catch up to the US given accelerating vaccination rates and robust commodity prices and look forward to seeing improvement as activity returns to normal levels.

 

Our Strategy

Our portfolios were fierce coming into June as they moved in line with markets and most of our positions having a sting finish. Particular standouts coming from the technology, automotive, and real estate sectors as we saw broad gains across most areas within the markets. These included companies such as Nvidia, Airbnb, and General Motors that are all benefiting from the resurgence of the global economy.

Due to the easing of restrictions outside of the US, we believe that we will continue to see a catch-up in growth from other regions which is why we continue to shift exposure to investments that benefit from this recovery.

We are confident in our diversified approach and our portfolios continue to benefit from their higher weighting inequities. Although markets could be slightly stretched in the short term, the world returning to normalcy in the near future which should provide markets with what they need to move higher over the next year. It’s an exciting time to be an investor!

 

Visual of the Week

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