Market Commentary

Making Cents of the Markets

Listen now to the most recent Making Cents of the Markets on CKNW, where we discussed recent market volatility after the August U.S inflation data was released.

As September is World Alzheimer’s Month, Lori talked about some of the early signs to look out for and how to help a loved one, affected by Alzheimer’s or dementia, plan for their future.

Click to listen here.

 

Wealth Professional Canada recently interviewed Lori on their podcast about her career and why she is so passionate about her client’s financial well-being.

Spurred on by enterprising parents and inspired by her Oma, she interned at Canaccord at the age of 15 and was a licensed advisor at just 22. Lori has since gone on to establish a very successful practice over the past 20 years as she has always focused on her ethical approach.

She is eager to learn everything about her clients, even down to the names of their pets!

Listen here.

Beyond the Markets

Shipyards Festival 2022

The all-day music festival is back and coincides with Car Free Day North Vancouver, on Saturday, September 17th.

This free event is packed full of music, family-friendly activities and so much more! From 12pm-10pm, you can grab eats from local food trucks, shop from local merchants and listen to some popular acts like Yukon Blonde.

Find out more about the schedule here.

 

Be in the Know

“Love, when sincere and deep, easily forgives and forgets.” – Ivo Andric, Yugoslavian writer

Inflation pressures remain stubborn as Disney’s Gus, the Yugoslavian field-goal-kicking mule  

While inflation expectations had been relaxing – a recent Fed survey of consumer expectations for inflation in 12 months came in at 5.7%, down from 6.2% in last month’s survey – the CPI data fell only a little in August (8.3% vs. 8.5% in July and 8.1% expected). The worst part was core CPI, which excludes gasoline and food and that the Fed tends to prefer, actually went up from 5.9% to 6.3%. One offending data point was rising rental rates.

The U.S. Treasury Secretary and former head of the Federal Reserve Janet Yellen said that the U.S. economy can still avoid a recession, though it would require “some good luck.” Today, the economic bellwether FedEx, which we don’t own, saw its shares drop over 20% after reporting a stark drop in shipping activity as consumers tone down consumption. The CEO believes that good luck may not be forthcoming, saying they believe a recession will occur.

What is lucky is -as Yellen also reminded everyone – that there are almost two job vacancies for every worker looking for a job. This would be the strangest part of a recession, should it officially materialize.

Because unemployment is so low, this is leading some to believe that if there is a recession, it will most likely be mild. That’s a pretty good outcome considering how wildly central bank interest rates have spiked to fight inflation with more sure to come.

A turning point in the war?

As we all know, much of these inflationary pressures were from Covid supply chain disruptions and chaos inflicted on energy prices due to war. A war that has taken quite an embarrassing turn for its instigator in the past week.

In what experts are widely calling the most important development in the war since Russian troops backed away from Kyiv, the Ukrainians were able to dupe the Russians into believing a counter-offensive attack was coming in the south, thereby drawing tens of thousands of Russian troops down there. But the big push took place in the poorly guarded north.

Russian hardliners have been especially critical of Russia’s retreats from key Donbas areas. Putin said nothing about the war during a public speech last weekend given at a Moscow Ferris wheel opening, which offers sprawling views of Moscow. Hardliners sarcastically joked that the Russian frontlines could now be seen from the top of it.

In a meeting with China’s leader Xi and Putin in Uzbekistan, Putin admitted that China privately expressed “questions and concerns” after this latest setback in Russia’s war. China is not likely to step up support for a losing Russian war campaign, though they remain all too happy to buy discounted Russian oil and other wares. China wins even if Putin loses, perhaps even more so.

What twists and turns this battle takes next are unknown. But winding it down at some point should prove helpful in fighting inflation and easing the pressure off Europe’s economy.

That includes toning down the fear and uncertainty that a senseless war stoked by an erratic and irrational nuclear power inspires.

Our Strategy

“Life is like riding a bicycle. To keep your balance, you must keep moving.” -Albert Einstein

As economic data continues to show mixed signals on whether inflation is on the decline, we are once again reminded how valuable staying well balanced and diversified is, during times like these.

Legacy portfolios have finished the week outperforming markets yet again, as they were down much less than the major indices. We reacted to the latest market volatility by trimming some weight from sectors (mostly technology) that were most affected by the hotter-than-expected inflation data.

Again, trimming up some positions when market volatility increases is key in protecting the portfolios. This risk management aspect is just a part of our active management strategy that helps us stay one step ahead of markets and outperform. We continue to wait for a sustainable rally in markets so that we can put some cash back to work, however, it is important for us to be patient.

Next week we will keep a close eye on the Fed’s next move, as they are scheduled to make another interest rate decision on Wednesday. As well, on Tuesday Canadian inflation rate for the month of August is expected to show a slight cooldown from 7.6% to 7.3% – it is not much, but it’s progress!

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