Frank McInnis

Current Market Review

Well it has certainly been a very unusual and eventful past six months! Given the virus, our in person meetings have been more limited over the past year.

Health Canada approved the Oxford University Astra Zeneca vaccine for use in the fight against COVID-19. Millions of Canadians are expecting to be inoculated in the coming months. In the U.S., the House of Representatives passed Biden’s US $1.9 trillion ‘relief ‘ bill. They estimate that about 9% of this will go to the American people (the rest to special interests, payoffs etc.) It now heads to the Senate for final approval.  Nevertheless, some should trickle into the economy.

We have experienced some volatility over the last month in the markets but there were some slight gains. In the U.S., the S&P 500 Index ended February slightly higher than where it started. In Canada, the S&P TSX Index started the month of February strong and ended slightly up from its starting point. The MSCI World Index, which reflects returns for developed equity markets around the globe, ended flat on the month.

Our market indicators remain up (see Market Trend chart) in this the ‘good season’ and so we should remain invested in a broadly-diversified portfolio based on our risk tolerance. In uncertain times, it is important to stay focused on our long-term goals and stay invested.

As always, should you have any questions regarding your portfolio, please do not hesitate to contact my office.

 

Current Market Review

Well what a six months it has been! Back on our last post March 4 the TSX was down 5.1% and the S&P500 was up 3.2% and the Covid Virus was coming! On March 27 the TSX was down 25.6% and the S&P500 was down 15.3%! As of last Friday the TSX was down only 2.1% and the S&P500 is up 9.5%. Oil went from $22 a barrel on March 27 to $43 a barrel today. And our dollar swung from $71.5 to $76.34 US today.

A V-shaped recovery? Yes but there have been some winners (ie. tech) and some losers. (ie. banks, airlines, entertainment)

What does the future hold for the markets? Well a vaccine would be nice! And “The market usually rises going into a US election with both candidates promising anything and everything. Even Joe Biden has said that he will not raise taxes on people making less than $400k per year or the 90% of businesses out there that are mom and pop and employ less than 50 people.”

Again we will keep our fingers crossed!

Current Market Review

The TSX was down 8.9% on the week ended Feb 28. The S&P500 was down 11.5% on the week.

This crash is now the fastest in one week following a new high in stocks!

Is the coronavirus a “black swan event?” i.e. ” Something that comes out of left field and is in this case different enough from past such pandemics; not as predictable, and we don’t have proven vaccines, and it may take too long to get them developed and approved as it currently stands?

The odds could favor a V-shaped rebound if there are no serious signs of the virus continuing to mushroom.” As of today this looks doubtful as it is certain to affect specific sectors. Time will tell.

We are still in the “good season” for money flows and treasury yields are at record lows which is very bullish for the market. Our three arrows remain up despite what has happened so far. We will keep our fingers crossed!

Current Market Review

As of August 23, 2019 the TSX Composite was up 12% YTD and the S&P500 is up 11% YTD in Cdn dollars. The market is down a bit from our last post but the summer as usual is more volatile and rarely up which is also the case this year.

Bond yield curves in Canada and the US have turned negative or flat. (i.e 2 yr treasury / 10 yr treasury : Can 1.37 % / 1.17% and US 1.53% / 1.54%) So given this change in yields, and given that it’s inversion often signals a recession down the road, the markets have pulled back somewhat recently.

Oil closed at $54.17 on Friday, down from our last post in May but still up 19.3% for the year so far. The embargo on Iran initially caused prices to rise in the spring but prices have fallen as inventories continue to grow thanks to other nations and the US continuing to pump out large amounts.

Global equity markets endured another volatile week last week as the U.S.-China trade dispute escalated, with China announcing retaliatory tariffs, as it had promised and President Trump following suit by imposing more tariffs on China in response. Trump also ordered US companies to curtail business with China!

Our 2 trend arrows remain but our seasonal arrow turned down mid summer and so will remain down until the later half of October at least. Stay tuned!

Contact Info

Frank McInnis CPA, CA

Financial Security Advisor, Mutual Fund Representative

Botica Capital Management

49 Avondale

DDO, Qc

H9A 1W2

Tel 514-684-9636 ext 41

Fax 514-683-5799

AO           ODC

KYC          FDC

FI              IF