Market Commentary

Making Cents of the Markets

Listen to this week’s Making Cents of the Markets on CKNW where we discussed strategies for creating an income portfolio in a low-interest-rate environment, and how the 4 stages of retirement affect your financial planning. Listen now here.

Beyond the Markets

A hint of summer shone through this week as temperatures rose above 20 degrees across B.C.! With the sunny weather expected to continue over the weekend, we encourage everyone to take advantage and enjoy being outside! The local Vancouver beaches offer the chance to appreciate the Vancouver scenery whether you’re biking, walking, or just catching some rays of the sun. And with the large outdoor public spaces, it is easy to maintain distance so that everyone can enjoy. Some of our favourite beaches are Sunset downtown, Jericho in Kitsilano, or Third in Stanley Park!

Be in the Know

Another great week for markets as they continue to hit new all-time highs due to several positive catalysts. These include a strong start to earnings season and robust economic data where we see evidence every day that growth is clearly improving around the world. Investors have been expecting strong 1st quarter earnings and it appears that analysts were likely too conservative with results beating expectations by over 20% on average so far. More importantly, companies are raising their estimates for upcoming quarters which is supportive for higher stock prices in the near term.

All eyes were on US inflation this week as it increased 2.6% from March last year and was in line with expectations. This appears high on an absolute basis, but one needs to remember that this figure was compared to a lower base a year ago when oil and other commodities were far lower. Most of the upside pressure came from gasoline prices, seen by the fact that if you strip out volatile items like food and energy, inflation only rose around 1.6%. This was encouraging to the market as investors believe price increases will be transitory in nature and will not lead to increased interest rates any time soon.

Retail sales out of the US also crushed expectations as they jumped 10% in March due to more businesses re-opening and government stimulus checks hitting consumers’ bank accounts. Consumer spending accounts for 70% of US economic activity, which goes to show the significance of this reading. Economic data was relatively light out of Canada as the main highlight was that business sentiment accelerates as firms reported less uncertainty and strengthening demand from weak levels a year ago. Next week our focus remains on earnings season while keeping an eye on inflation statistics in Canada as the Bank of Canada is expected to keep interest rates at a low on Wednesday.

Our Strategy

Our Legacy strategies continue to move higher and many of our companies had a very strong week. Gains were relatively broad across most sectors with the highlight being materials as copper miners and lumber producers capitalized on prices heading higher on increased demand.

Notable earnings this week include financials such as Blackrock and Goldman Sachs, both of which we own and handily beat analyst expectations. Both companies are leaders within their respective areas of asset management and investment banking as they saw double-digit growth and raised expectations for the year ahead. We remain well-diversified and look forward to the remainder of earnings season that we expect to lift markets to new highs.

Visual of the Week

With the beautiful weather we have been having, we hope that everyone gets outside and enjoys the sun while keeping safe!

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.