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Stock markets bifurcated again with a serious wake up from a leading Fed President who earlier this week espoused the necessity to raise interest rates faster than Wall Street was banking on. Furthermore, Ms. Brainard highlighted the need for the US Central bank to drastically reduce its inventory of bonds at an accelerated rate if they have any hope of quelling inflation anytime soon.  The risk of course is that inflation from Covid and supply chain disruptions translate into costs that push labor inflation aka the stagflation environment of the 1970s’.

We note with interest, that employees at both Starbucks and Amazon are signing union cards for certification, which could be the tip of the iceberg especially with a US administration pro union. We can sympathize with their situations because healthcare costs in the US can bankrupt families in the proverbial heartbeat or lack thereof. Unlike Canada, where we have universal healthcare… just not enough doctors to help us. Speaking of Canada, the Liberals unveiled their latest budget including a new tax on Canadian banks. The deficits will likely be lower than initially thought and ironically its upside revenues from our energy exports, something our leader wants to curtail. We note Suncor was denied a mine expansion that would keep their giant operations running smoothly for decades to come. You will never guess which Canadian company is actually building out electrical charging stations to support zero emission vehicles, Suncor. We also note and support government initiatives to fund carbon capture technologies especially if they are used to generate hydrogen to be used in hydrogen fuel cells. Because if you think electricity prices are cheap right now, wait until the Site C dam comes online.

Canada’s job situation also improved last month, so no surprise Canadian stocks faired rather well this week and not just the energy, gold and material stocks. As our economy benefits from rising commodity prices from coal to nickel to zinc and steel, employees will likely find themselves in the driver’s seat when it comes to wages and benefits.

Meanwhile, the street was a flutter with chatter about twitter as Elon Musk declared his 9.2% interest on Monday sending the stock rocketing higher. The fact that he was late filing for up to 10 days, (you need to file within as soon as you crest 5% with the SEC) will probably cause a fine, but he and the SEC know each other very well. We will need to wait and see what the penalties might be but with a board seat, expect a shake up of the company and its future direction.

On the global scene, Russian atrocities are only serving to solidify NATO’s resolve to stop Mr. Putin and his troops shove their tanks into reverse driving back towards Russia as fast as possible. The Ocean Wealth team at PI Financial have contributed to the Red Cross to help out the people of Ukraine. If you wish to join us here is the link:  Ukraine Humanitarian Crisis Appeal - Ocean Wealth Team OTG Don (redcross.ca)

Next week, investors will get another look at CPI and PPI on Tuesday and Wednesday and if you look below, the numbers could get scary. The whisper number on CPI is 1.2% and 1.2% for PPI as well. If you think food and gas prices are high right now….

And last but not least, Good Friday is a holiday on both sides of the border, so enjoy a well-deserved break, hopefully with family and friends. Markets are open on Monday, but most other businesses are closed for the stat.

See you Tuesday.

Cheers Steve and Michele.

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