Market Commentary

Making Cents of the Markets

Listen now to the most recent  Making Cents of the Markets on CKNW, where we talked about what’s going on in North American markets, the official kick-off of earnings season, and inflation in the economy. We also discussed what you should do if you have cash on the sidelines right now!

Click to listen here.

 

Beyond the Markets 

With inter provincial travel now up and running once again and the wonderful summer weather here, now is the time to get outside and enjoy everything our country has to offer! A bike trip, even if it is local or overnight, gives you a brand-new rhythm and perspective of your surroundings! Here are trips of varying types, lengths and terrain profiles that will inspire you to look for adventure across Canada this summer.

 

Be in the Know

Despite a strong start to earnings season, North American markets pulled back slightly due to ongoing concerns about the Delta variant and hotter-than-expected inflation out of the US. We remain optimistic on the global economic recovery but realize that investors may use these reasons to take profits after a great start to the year. Over 10% of companies reported earnings this week with most companies beating analyst expectations which is important as growth in profits leads to higher stock prices over the long-term.

The Bank of Canada kept the benchmark interest rate at the low of 0.25% and plans to keep rates low until slack in the economy is absorbed and inflation sustainably returns to its 2% target. The current expectation is that this will not occur until the second half of 2022 with economic growth forecasted to increase by 6% this year and 4.5% in 2022. Low rates continue to drive activity in the housing market with new housing starts coming in above average levels with BC leading Canada as multi-family residences increase to meet demand.

In the US, inflation rose 5.4% in June which was the largest jump in almost 13 years. Markets were resilient after this news was released as most of the increase came from pandemic-specific spots of inflation such as used cars and airline fares. Central banks in the US and Canada reaffirmed that inflation will be transitory and expect them to fall in the coming months. Positively, we saw growth in US retail sales and internationally as China’s second quarter GDP rose at a 7.9% annualized rate.

 

Our Strategy

Earnings season started on a very positive note with robust growth and guidance from our portfolio companies that included Goldman Sachs, Blackrock, and Aritzia. We remain bullish on these companies’ prospects going forward as they are well positioned to take advantage of strengthening economic conditions. We look forward to receiving additional updates over the coming weeks as they continue to reaffirm our conviction in how we are positioned.

Our portfolios moved in line with our benchmarks during the week as we followed our discipline and made some strategic changes in the portfolios. We remain positive on the economy and markets and we always have a plan in case conditions change and are prepared to raise cash to redeploy into leading stocks that we expect to outperform markets due to their superior fundamentals.

 

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