Market Commentary

Making Cents of the Markets

New episode of Ready.Set.Retire! Lori and Jon are discussing Financial Literacy month and Rob Carrick’s article from the Globe & Mail on six things a brutally honest banker would tell you about mortgages, HELOCs and market-linked GICs. Listen as they discuss why you should be skeptical of some products or advice that is available out there.

Listen here.

Read the article here.

 

Listen now to the most recent Making Cents of the Markets on CKNW, where we discussed markets, the economy, and beyond! Lori breaks down how seasonality effects markets, and goes over some tax planning tips for year end.

Click to listen here.

 

Beyond the Markets

Hitting the stage with a variety of new show-stopping productions, Vancouver’s Arts Club Theatre Company is back open across the lower mainland! Beginning in November and running to the end of July 2022, five shows are running at the Stanley Industrial Alliance Stage, including Dolly Parton’s Smoky Mountain Christmas Carol, Kim’s Convenience, Kinky Boots and more!

For more information about the Arts Club shows and venues, check out their website here.

Be in the Know

North American markets were mixed over the past week with the S&P500 flat and TSX slightly lower, as investors digest several economic and corporate updates with earnings season starting to wind down. Highlights this week include continued strength from home improvement companies such as Lowes & Home Depot, as well as general retailers like Target that beat analyst estimates and demonstrate the power of the consumer. This was further confirmed by US retail sales reading that expanded 1.7% in October, the strongest gain since March!

In Canada, the most notable update was October’s inflation report that was in line with expectations and showed that prices rose 4.7% from a year ago due to a low base effect and higher commodity prices. The largest drivers behind the increase were energy, shelter, and food prices mainly due to recovering demand and supply chain constraints. The Bank of Canada expects inflation to remain higher until the middle of next year before normalizing when they have indicated their intentions to start increasing interest rates.

One common theme that we have mentioned is that equities remain one of the strongest hedges for inflation as many companies can pass price increases to the consumer. This is one of the many reasons we remain bullish on markets into year-end as positive seasonality leads us to believe that we are likely to experience a “Santa Claus” rally in December. Whether it is the upbeat sentiment around holiday shopping, investment managers going on vacation and not hitting the sell button, or just a random market anomaly, we remain confident in the months ahead and beyond.

 

Our Strategy

Our portfolios moved in line and even slightly outperformed the markets this week as markets were rather mixed with earnings reports and general sentiment driving performance around specific sectors. Some companies, despite good earnings, are getting hit after reporting, with many citing increased costs and supply chain issues as the cause. Should we see these issues improve, we could possibly see earnings beats in coming quarters since expectations have dissipated. We continue to make changes as necessary while staying invested to take advantage of the general strength in markets. Our plan remains to add to our mightiest opportunities while being well-diversified across multiple sectors. This diversification is important as it leads to more consistent returns over time.

Key commodities such as oil and natural gas pulled back this week as Covid cases remain elevated in Europe. Some European markets are hitting new highs despite increased restrictions (Germany and France), however, we continue to favour North American markets as vaccination rates and cases have been amongst the best in the world. U.S. and Canadian markets remain resilient. We are looking forward to a strong close to 2021!

 

Visual of the Week

We sympathize with those who were affected by the recent flooding in our beautiful province. If you wish to donate and support affected communities or find other ways to help during this time, follow the link 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.

CANACCORD GENUITY WEALTH MANAGEMENT IS A DIVISION OF CANACCORD GENUITY CORP., MEMBER-CANADIAN INVESTOR PROTECTION FUND AND THE INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA