Your Money - February 12th 2021

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I don’t want to whine but the January 1st holiday seems like ages ago. Maybe I am finally succumbing to the cold grey days of winter. Its dark when I start work and its dark when I go home. Don’t get me wrong, the stock markets have been on fire but the other side of my brain keeps staring at new issue stocks skyrocketing beyond all rational reasoning. Take Bumble, the online dating app that went public at $43 on Thursday. This is up from the original range of between $28 and $30 last week. The stock now has a market cap in excess of $14 billion. Meanwhile their latest nine month’s revenue came in at $376 million and lost $84 million dollars.  What’s not to like? How about some earnings for a change?

Fortunately it looks like US politicians will come through with the latest stimulus bill sooner rather than later, at least that is what the bond market is telling me. Ten year US Treasuries hit 1.21% and 10 year Canada bonds now yield 1.02%. Just a whiff of inflation could send prices tumbling causing yields to rise which might be the catalyst for the next pullback. Remember on average stock markets pull back 5% at least once a year and 10% once every two years. However, rising interest rates are good for banks and insurance companies and we still think telecoms will benefit from ongoing 5G technology upgrades.

This week’s rally was led by semiconductors like Intel, Micron and AMD plus energy and financials. Crude oil continues to climb due in part to shrinking supply and as long as OPEC + Russia can hold the line, prices should continue to improve.

As for next week, more earnings to review with 437 more companies reporting in the US next week and 49 in Canada including Emera, TC Energy, Barrick gold and Capital power

Happy trading and enjoy the long weekend.

Cheers Steve.

Information contained herein represents the views of the writer and not those of PI Financial Corp., and based on assumptions which the writer believes to be reasonable. The material contained herein is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. This information is intended for distribution in those jurisdictions where PI Financial is registered as an advisor or a dealer in securities. Any distribution or dissemination of this article in any other jurisdiction is strictly prohibited. PI Financial and/or its’ officers, directors, employees and affiliates may, from time to time, acquire, hold or sell a position in the securities mentioned herein.

Steve Bokor

Steve Bokor

Portfolio Manager