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It was a short week for US investors following their Memorial Day weekend. Fortunately June helped push stocks in the right direction following better than expected Manufacturing, Service and Jobs data. Two thirds of the Dow Stocks closed up this week with many hitting 52 week highs with the “back to normal” stocks showing leadership. Walgreen Boots, Chevron and Goldman Sachs topped the leader board while Nike JNJ and United Health fell to the bottom. Day traders were back to their usual shenanigans driving stocks like AMC, Bed Bath and Beyond and BlackBerry in Canada. AMC in particular was a on a rollercoaster ride after management announced plans to issue new treasury shares to shore up their balance sheet but also gave a note of caution to investors.

We also liked President Biden’s bid to accelerate the adoption of zero emission vehicles by proposing increased credits for consumers. Companies like Fisker Nikola and NIO all had a great week… but the same cannot be said for Tesla which fell 4%. Apparently China vehicle sales are slowing which may lead to a falloff in European stocks once companies like Volkswagen and Volvo increase their electric vehicle models.

Meanwhile In Canada, the big story was Inter Pipeline securing a White Knight to merge with rather than being forced to accept Brookfield’s initial low ball bid. They of course are crying foul after submitting a second bid that at first glance may be superior to Pembina Pipeline but time will tell.

Turning to energy stocks, it was a great week with the TSX Energy Sub Index rallying nearly 9% this week as the price of Crude Oil topped $69 per barrel. Investors were embolden by OPEC’s decision to gradually increase production over the next six months. We also note bullion recovered much of the losses from earlier in the week so mining and material stocks also performed well which helped propel the TSX to its first ever close over 20,000.

Next week investors, particularly bond investors will be keying in on the inflation data. Outsized numbers could cause markets to stall especially if traders view the steady increases as permanent rather than transitory. If the ten year spikes back above 1.70% it could negatively impact stock markets as well. We also get the monthly rate decision from the Bank of Canada and there is building speculation he could start to withdraw liquidity from the banking system.

On the plus side, over in Europe, the UK has approved the injection of Pfizer-BioNTech for teenagers 12 to 15. We continue to see the roll out of vaccines in Canada. In fact Canada has now surpassed the US for single dose injections of the vaccine. Go Canada Go.

Stay Safe

Happy Trading.

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