Market Commentary

Making Cents of the Markets

Listen now to the most recent Making Cents of the Markets on CKNW, where we discussed the recent Santa Claus Rally that brought 2021 to a strong finish. Lori focused on the reasons we remain optimistic for the year ahead, and provided insight into some of the risks that the markets may face moving forward. Plus, some breaking news from Prime Minister Justin Trudeau’s live update on stimulus and economic support.

Click to listen here.

 

Beyond the Markets

elebrate the 500th anniversary of Da Vinci and his art by visiting the Da Vinci Experience Art Exhibition. The exhibition offers an immersive experience with four different rooms. Guests are first introduced to Da Vinci’s biography and talents. Replicas of machines built by the inventor are featured in one room.

You can check out their website here for additional information.

Be in the Know

After a strong end to 2022, North American markets pulled back slightly to start the year after the US Federal Reserve released notes from their latest meeting in December. The meeting notes showed the central bank is ready to dial back its economic help more rapidly than some had anticipated by shrinking its balance sheet while raising interest rates. Fed officials are expecting three interest rate hikes this year though this may be too ambitious as they must take time to gauge how their actions impact the economy.

Higher interest rates aren’t necessarily negative for markets, as we saw economically sensitive sectors such as financials, materials, and industrials all close positive this week as investors look at higher rates as a sign of an improving economy. We continue to see leadership shift towards these areas as the world looks beyond Omicron and many believe that this is the start of Covid transitioning from a pandemic to an endemic. This would take place as vaccinations and exposures result in a less severe disease such as influenza.

Other highlights were jobs reports out of both Canada and the US that showed continued improvement in the labour market. Canadian employment grew above expectations with the addition of 55,000 jobs in December and our economy is now 1.3% above its pre-pandemic employment level with the unemployment rate moving down to 5.9%. The US economy missed expectations as they only added 199,00 jobs though their unemployment rate fell to 3.9% with most jobs from the leisure and hospitality sectors. The silver lining remains that the economic recovery continues on track despite the latest wave

 

Our Strategy

Our portfolios held in relatively well compared to our benchmarks given our strong exposures to economically sensitive sectors that outperformed markets this week. Sectors that were impacted most by interest rate fears included the technology and consumer discretionary sectors that pulled back after leading markets in 2021. Given that we were positioned for this shift, we did not make any changes as we remain confident in our current exposures.

We continue to be bullish on the year ahead due to several factors. Most importantly, we expect corporate earnings growth to remain robust which is one of the strongest drivers of stock prices. We also expect the global economic recovery to pick up as travel and spending normalize once we are past the latest wave of Covid. The world is always changing though we look forward to staying on top of what is happening, making changes as needed so that you can have peace of mind!

 

Visual of the Week

As we plan for the year ahead, we wish you and your family a happy, healthy, and prosperous 2022!

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