Market Commentary

Making Cents of the Markets

Listen now to the most recent Making Cents of the Markets on CKNW, where we discussed the latest in markets and Canadian interest rates. We will also talk about the difference between good debt and bad debt, and whether or not it’s a good idea to leverage your portfolio to invest.

Click to listen here.

 

Beyond the Markets

From December 10th to 19th, enjoy a free festive walk in downtown Vancouver that combines the love of flowers, local artists, and a truly unique display with the annual Fleurs de Villes. From Robson Street up to Alberni, you can see over 40 unique pop-up installations, creating a Floral Trail which truly upholds the event’s name – flowers of the cities.

You can check out their website here for more details.

Be in the Know

The minor pullback over the last two weeks was short-lived, as global markets rebounded this week after several reports showed that Omicron to be milder than previous variants. Initial studies in South Africa were promising in demonstrating that three doses of the Pfizer vaccine could neutralize the variant. This news led to broad strength in markets with key commodities like oil confirming the bounce. We were pleased to see this take place as we believed that the selloff was fear-based, re-confirming the importance of not overreacting until more information is known.

The highlight in Canadian news this week was during Wednesday’s Bank of Canada interest rate meeting, where the bank kept interest rates at the lows (as expected) and projected that the first increase will likely occur in the middle quarters of 2022. Analysts expect the Bank to increase interest rates two times next year, although the bank would like to continue to see GDP catch up to pre-pandemic levels. Additionally, the trade balance came in positive for the fifth consecutive month in October due to strong exports of petroleum products and motor vehicles as our economy improves further.

In the US, all eyes were on Friday’s inflation report for November that showed that prices increased 6.8% year-over-year. This news was digested well by markets as it came in line with expectations. A bright spot from the report was that increases in used cars, lodging, and airfares were all lower than expected which could be one of the first signs that inflation is nearing a peak. The focus next week remains on inflation with Canada’s November reading on deck as well as an important interest rate meeting from the US Federal Reserve on Wednesday.

 

Our Strategy

Once we received these positive reports on the Omicron variant at the start of the week, we immediately put cash to work back into equities as we remain bullish on markets into year-end and beyond. Despite the short Omicron setback, it appears that we are back on track for positive seasonality to run its course and assist markets to hit new all-time highs.

Our portfolios had a great week, supported mainly by large-cap leaders as quality investments remain our focus moving forward. We believe that the last hurdle to get over before year-end will be next week’s US Federal Reserve meeting as markets will likely continue to rally further if there aren’t any surprises. In light of this, we maintain a flexible approach though are confident in our positioning moving forward.

 

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