February 5, 2021
Making Cents of the Markets
New episode of Ready.Set.Retire! that you don’t want to miss!
Special guest, Helen Murphy from the West Van Seniors’ Activity Centre joins Lori and Jon McComb to discuss endless opportunities of how retirees can stay connected, have some fun and keep active! They also touch on signs and symptoms of dementia to be aware of with our loved ones and how important mental and physical health really is!
Listen now here.
Listen to this week’s Making Cents of the Markets on CKNW where we discussed GameStop and the risks surrounding hedge funds. Check it out here.
Beyond the Markets
Dine Out Vancouver is back for its 19th year starting today! As the largest annual celebration of food and drink with over 330 participating restaurants, there are no shortage of options to indulge your taste buds. Until March 7th, dining establishments throughout the Lower Mainland will be serving up multi-course meals in price ranges from $15 to $54 for both dine in and take out so that you can stay safe while supporting local businesses.
Click here to peruse the menu.
Be in the Know
Last week’s pullback was short-lived as global markets rallied this week and are back in positive territory for the year as both the S&P 500 and TSX finished the week at all-time highs. Positive earnings announcements, improving manufacturing data, and US stimulus updates were all drivers around improved sentiment this week. Additionally, the dust has appeared to have settled down around the GameStop fiasco as the stock was down 80% on the week as any concerns have dissipated. We are pleased to see rationality return to these stocks as many lessons were learned by amateur investors and hedge funds alike.
Earnings season has been far better than expected, as most companies have reported and beat analyst estimates as we now expect the fourth quarter to record positive growth vs. initial expectations for a decline of around 6%. The growth has been mainly attributed from the technology, materials, and healthcare sectors. Expectations for the 2021 year are for double digit growth which is important as stock values and markets tend to move with profits over the long-term.
On the political front, the US Senate passed a budget resolution to fast-track the $1.9 trillion stimulus plan which paves the way for the budget plan to eventually be adopted into law in the coming weeks without needing the support of Republicans. Regarding economic data, the Canadian economy lost 213k jobs in January missing expectations by a wide margin as the unemployment rate rose to 9.4% from 8.8%. Lockdowns and curfews, once lifted, should allow for a recovery over the coming months. Job growth returned to the US as their economy was able to add 49k jobs in line with expectations. We remain optimistic that vaccines will lead to more consistent improvements in the new year.
Our portfolios had a good week and we are in solid positive territory YTD. We quickly went back to work early in the week once we noticed capital flowing back as the GameStop short squeeze reversed. We took advantage of the pullback and bought several leaders at lower prices that include the likes of Nike, Mastercard, and Blackrock. We do not mind volatility in the near-term as it allows us to pick up strong companies at more attractive prices as we continue to improve portfolios for the year ahead.
We had a number of positive earnings updates that included record quarters and double-digit growth from Google, Amazon, and Paypal. The pandemic has accelerated trends in digital marketing, online marketplaces, and payment processing which is why we remain bullish on these themes moving forward. We are also positioned in cyclical areas like financials, industrials, and materials that we believe will improve with the economy over the coming year. Being well diversified but focused within leading areas of the market remains our approach as we look forward to continued strength.
Visual of the Week
One thing we pride ourselves on is always staying on top of events as they happen, whether it be volatility created by stocks like Gamestop or a global pandemic. We believe that a strong portfolio manager is curious to figure out the why, competent to understand what to do, and have the character to always act in the best interest for clients.
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