Market Commentary

Making Cents of the Markets

Listen to this week’s Making Cents of the Markets on CKNW where we discussed Canadian unemployment and how to avoid common investing mistakes! Listen here.

Be in the Know

North American markets closed flat for the week, as investors digested a new batch of corporate earnings and continued to get mixed updates on a potential stimulus package. The week started with markets moving lower as two Covid-19 trials in advance stages were paused over an ‘unexplained illness’ and other safety concerns – Johnson & Johnson, Eli Lilly. However, vaccine news turned positive today with Pfizer and Germany’s BioNTech, stating they could apply for emergency use of their Covid-19 vaccine candidate in the U.S. as soon as a safety milestone is achieved in the third week of November. Let’s hope this goes through and we can get back to normal soon!

The U.S. election is around the corner, yet negotiators are still actively engaged in discussions to try to strike a fifth pandemic relief package. Last week the House Democrats passed a $2.2 trillion relief bill and President Trump responded by stating he would raise his offer for a package above the current level of $1.8 trillion. We remain optimistic that a deal will be made in the next month, which will push markets higher. However, other issues including healthcare aid and funding for Covid-19 testing remain key sticking points that still need to be worked out.

Strong retail sales data on the U.S. front was also published today. Led by the clothing and accessories sectors, retail sales rose 1.9% in September, easily topping a Dow Jones estimate of 0.7%. Consumers spent at a much faster pace than expected in September and these headlines helped fuel today’s market strength.

Our Strategy

Markets remained mixed this week leading us to remain on pause. We have a healthy cash position, yet we remain invested in high quality companies that we believe will exceed analyst expectations this earnings quarter. One of our companies reported this week and we are pleased to announce that Aritzia closed 13% higher. We are currently looking at adding more consumer discretionary names to the portfolios and will look for favourable entry points over the next month.

We are less than 3 weeks away from the U.S. election and believe that we will see increased volatility leading up to and shortly after November 3rd. We view this as an opportunity and will look at deploying some of our cash during this time. We expect markets to gain momentum in the next few months and we look forward to participating further in the market rebound.

Chart of the Week

We have always looked at different leading indicators, to gauge the general health of the economy and we want to position our clients and portfolios for the future. The chart below shows the transportation industry index which includes companies like FedEx, UPS as well as railways. It gives us some good insight into how companies are performing that are moving goods in the U.S. as well as around the world. The index is reaching an all-time high and generally speaking, if transports are doing well, the economy is continuing to recover.

Beyond the Markets

Cranberry fields forever! From now until October 23, Hopcott Farms in Pitt Meadows is offering daily cranberry tours to see how their cranberries are grown and harvested. This walking tour will take you through every step of the process, rain or shine! Once you’re done the tour, you can also head over to their market for some fresh produce and meats.

Click here to learn more and purchase your tickets.

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.