April Fools the Market Rules - Your Money April 1st 2021

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You have to hand it to the day traders. They managed to step back in to the tech space with a near vengeance and drove the NASDAQ straight up on Wednesday and Thursday. Without that rally, the index would have closed down on the month. But fear not, it was more of a rotational trade this week as money poured into the “return to normal” economy. If we look at the top Dow stocks it includes Boeing (they got another order for 100 Max 8 planes), Walgreen Boots Alliance (they are going to be providing vaccines for years) and Microsoft and Salesforce.com (the latter two really rebounded after President Biden’s speech yesterday).

Meanwhile in Canada, investors really caught a bounce thanks to falling bond yields which in turn caused the US dollar to fall and that led to rising commodity prices. Crude oil had an interesting week. Things looked bleak over in the Suez Canal with predictions of a shutdown that could last weeks, but all of a sudden the diggers and pullers freed the mighty tanker and sent it along its merry way with a huge train like procession of other ships snaking their way out of the Persian Gulf. Crude prices firmed up last week on supply concerns and then tanked (pardon the pun) as soon as the congestion dissipated.

Then with President Biden promising trillions in capital spending, bond yields eased along with the US dollar. That sent commodities back up. Gold jumped $42 in the last two days and crude oil closed up $2.29 to $61.45 per barrel today.

Now before everyone jumps on the band wagon, while we enjoy our Good Friday Holiday, the minions in the basement of government offices are releasing the monthly jobs data tomorrow morning. With stock markets closed, it means the first crack to react will be Monday and while some of us will be at our desks, it will be a skeleton crew in most brokers office. Which reminds me, one of my partners said the best part about getting old is you can hide your own Easter eggs. Meanwhile stocks can exhibit increased volatility when volumes go down. Speaking of volatility, we note the “VIX” or fear gauge dipped to 17 for the first time since last February. Clearly investors are getting more bullish which is not a surprise given all the cash sitting on the sidelines.

Canadian investors went mad for mining, technology and forestry stocks. Dimension Lumber topped $1000 for the first time in…well it seems like forever. From a sector viewpoint, Gold, Technology both jumped 3% while Materials, Industrials and Consumer  Staples rose 2%.

Happy Easter & Stay Safe.

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Steve Bokor

Steve Bokor

Portfolio Manager