Market Commentary

Making Cents of the Markets

Listen now to the most recent Making Cents of the Markets on CKNW, where we discussed the effects of US inflation and the passing of the US infrastructure bill on the economy. We also talked about how to tell if your portfolio performance is good, and how you can compare apples to apples when measuring performance.

Click to listen here.


Beyond the Markets

Celebrate the creativity, diversity, and vibrancy of the city with the Vancouver Mural Festival. Beginning on August 4 and running until August 22, the festival spans over 11 Vancouver neighbourhoods and includes over 60 new murals. Explore dozens of featured events as VMF paints the town red, yellow, blue and every colour in between!

Learn more here.


Be in the Know


Markets have continued to push higher this week with the TSX up 0.2% and the S&P500 up 0.8%, closing at an all-time high. Markets remain resilient in the face of the Covid Delta variant and continue to hit new highs.


The $1 trillion infrastructure bill in the U.S. was finally passed earlier in the week! We have been waiting to see the Republicans and Democrats come to terms with their differences, which gave markets confidence that things may be a little smoother moving forward. The money will be spent on repairs and improvements of roads and bridges and also to shore up coastlines against climate change, protect public utility systems from cyber-attacks and modernize the electric grid. Public transit will get a boost as will airports and most lead pipes for drinking water will be replaced. Why does all of this matter to us as investors? The result is a more efficient economy, where more money will be spent to boost economic activity. This is another form of stimulus that will subsequently create jobs and support markets moving higher.


Economic data was light this week, however inflation numbers in the US hinted that inflation could have peaked short-term. This supported investor sentiment that the Fed won’t be too eager to increase rates earlier than expected. During the past 12 months, prices in all the items rose 5.4% which is unchanged from the prior month but still at a 12 month high. Naturally, as the economy opens up consumers are spending on food, cars, dining out and travel. To cater to that soaring demand, businesses have geared up operations, causing bottlenecks for materials, goods and labour. Keep in mind that scarcity triggers inflation and as prices for businesses go up – they do for you as well!

If you strip out food and energy, the so-called “core index’ for consumer prices rose just about 4.30% in July. Again, our belief is that most people are feeling the effects of inflation – at the gas pumps and at the grocery store – so we think it is better to look at the overall inflation rate for a more accurate picture. The good news is that it appears that the pace of increased inflation is slowing, and if that is the case, that is great for us as consumers. Especially when we want to get out of the house and spend a bit!


Lastly, investors continue to look farther ahead and dismiss most fears regarding the Delta variant. Although cases are climbing globally, it mostly includes those unvaccinated as they make up about 80% of the hospitalizations. We are seeing vaccination rates accelerating so hopefully we can move forward and leave this pandemic FINALLY behind us! Former FDA Commissioner Dr. Scott Gottlieb made a comment this past Monday that he sees this was the 4th and final wave. Let’s hope he is right. Markets are forward-looking and have shrugged off Covid concerns since the vaccine was announced, so we do feel this wave will have minimal impact on the economy as well.

2nd quarter earnings are basically done and they were impressive with 90% of companies beating earnings expectations. Onwards and upwards!


Our Strategy


We have made a lot of changes to the portfolios over the past month, however, trading was lighter over the past week. We are slightly above our target equity weight due to markets moving higher and we have also strategically allocated more money to industrials and financials. The infrastructure deal confirmed our bias and it was a catalyst for many of our holdings to outperform the market! We are excited for the year ahead in equity markets and continue to support higher exposure to stocks in our portfolios. We would welcome a minor correction at some point, as this is healthy for markets and also allows us to grab some stocks at a lower price that may have had a big run. We will manage the portfolios accordingly during times of increased volatility, but want to maintain a higher equity weight into next year as we continue to see stimulus, low interest rates, and pent-up demand for goods and services.


Visual of the Week

Today the team showed our support for the Ronald McDonald House at the Vancouver Island Golf Tournament! We are happy to be apart of an event that helps keep families together and advocates for children with serious illness.

To find out more about the Ronald McDonald House or donate, click here.

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.



Pinkowski Wealth Management

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