Market Commentary

Making Cents of the Markets

New episode of Ready.Set.Retire! Jon and Lori are checking in to talk about what to expect in markets in the second half of 2021. Together, they talk about how to position your portfolio with global recovery underway and how an active management approach benefits you during good times just as much as it carries you through the bad.

Listen here.

 

Listen now to the most recent  Making Cents of the Markets on CKNW, where we discussed the latest in North American markets. We also dived into how investing in Index Funds differs from an active management strategy and how to weigh renting versus owning your home in retirement.

Click to listen here.

 

Beyond the Markets 

With summer weather here to stay and recreational travel resuming, we are all eager for new adventures, new landscapes, and new connections. The diversity of BC in all of its terrain and its people makes it perfect for packing up the car, loading the trailer, and hitting the road! Choose your route (or routes) and get back in touch with your adventurous spirit as you rediscover the fun of new places and experiences with #ExploreBC’s guide to your road trip of a lifetime.

Be in the Know

After a short-lived pullback this week, North American markets rebounded and finished the week off positively. The reason for the minor weakness came from worries around the delta Covid variant that continues to spread globally and led to tightening restrictive measures in Southeast Asia. However, markets remained resilient and rebounded on Friday as countries with high vaccination rates have been far less effected by the new variant, thereby proving vaccines as an effective protection measure in combatting these mutations. We remain optimistic that other nations will receive more doses in the coming months leading to increased confidence globally.

The Canadian jobs report was the highlight of this week, reporting that employment rose by 231,000 jobs in June (thereby surpassing analyst expectations), and the unemployment rate fell by 0.4% to 7.8%. All the gains came from part-time jobs in the service sector, in fact the only negative reported was that full-time jobs fell minimally. The level of Canadian employment is now only 1.8% below its February pre-pandemic level. BC continues to lead the country as our unemployment rate fell to 6.6% and is the lone province with employment above its pre-pandemic level.

Looking ahead we are shifting our focus back to the health and growth of our portfolio companies, with second quarter earnings season kicking off next week. Analysts expect earnings growth to increase by 64% relative to the same quarter last year, which would be the biggest growth rate since 2009. Our expectations are for another quarter of positive revisions and guidance, though understand that there may be some concerns around rising costs or a temporary drag due to variants. Regardless, the trend of earnings and markets remains higher as we look forward to a strong second half of the year.

 

Our Strategy

Another boom to kick off the new month was led by many large cap leaders, such as Amazon and Apple, that are trending higher again ahead of earnings season. We made some minor changes to portfolios that included selling out of weak areas and rolling over into more powerful ones. Our exposures continue to favor areas that benefit from the recovering global economy and implement strong hedges for inflation because we believe leadership will shift back to economically sensitive areas of the market.

This is why we prefer active managers like ourselves that have the flexibility to take advantage of these shifts but more importantly protect to the downside during periods of uncertainty. We believe that we are still early on within the current bull market and are ready with some cash on the sidelines to deploy in the case of any pullback. Our long-term outlook remains positive for years to come!

 

Visual of the Week

Best of luck to all the English and Italian fans for the Euro Cup Final on Sunday – may the best team win!

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