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 things are catalyzing markets moving higher, including interest rates, employment levels, and COVID updates. We also discussed myths about retirement as part of Financial Literacy Month so that you can be more confident navigating your finances!

Click to listen here.

 

Beyond the Markets

As the days get darker, the City of Surrey is presenting an illuminated half-kilometre nature trail. The Bear Creek Park Lights is a free and family-friendly activity that you can reserve online from November 5th – 19th. The stunning lights will be sure to add some brightness to your day!

Reserve online here.

Be in the Know

North American markets had a mixed week with Canadian markets continuing strong mostly due to strength seen in the materials sectors, whereas US markets pulled back slightly off their highs. Key highlights from this week included an inflation reading in the US which showed that prices increased by 6.2% in October, above estimates, and the highest rate since November of 1990. This is likely a force of relative strength in the Canadian equity market, which has been a strong hedge for inflation historically with many commodity-based sectors doing well when prices increase.

Upward pressure in prices has been a hot topic over the last year with energy costs being the largest contributor. Oil prices have nearly doubled over the last 12 months, due to a much lower base ($41 oil a year ago). Shelter, food, and vehicle costs have also risen as price increases have been broad-based due to rising demand from the recovery and shortages in supplies. We remain optimistic that inflation will slow and normalize over the next year, but also recognize that markets have been resilient as they remain one of the best hedges during times like this!

Consumer sentiment has been dented mainly due to inflation concerns in the future which will likely be combatted through higher interest rates and other government actions. The latest positive update is that the US finally passed the $1 trillion infrastructure bill which includes significant investments to improve the flow of goods in coastal and inland ports. Events like the pandemic often lead to an acceleration of technology and change that should benefit the economy in the long term. While there were no economic updates in Canada this week, we look forward to staying on top of Canadian inflation and retail sales figures next week. Stay tuned!

 

Our Strategy

Our portfolios had a great week, outperforming benchmarks with notable strength from economically sensitive areas of the market that include materials, transportation, agriculture, and consumer discretionary. We were pleased with this performance, with mostly positive earnings results though the market has reacted negatively lately to any line or lacklustre results as strong beats have become the norm.

Our experience has led us to be more patient as quality companies have rallied back in the following weeks. With earnings season coming to an end, we have a clearer picture of the leaders that we want to add to, as well as the laggards that we want to sell. All in all, this will assist us in upgrading portfolios going into year-end. There hasn’t been a change in our positive view on markets as we continue to work to finish the year on a strong note.

 

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