Blog

This week was a real rollercoaster. Inflation fears set in early in the week and were realized on Wednesday when the monthly CPI hit 0.8%. And bear in mind, oil prices are higher than they were in April especially since the Colonial Pipeline was shut down by hackers over the weekend. Fortunately, calmer heads prevailed when the Producer Prices came in more muted on Thursday, followed by a zero increase in Retail Sales Friday. The buyers came in with a vengeance causing the Dow to snap back 795 points over the last two days. However, it should be noted US markets are still negative for the month of May. The TSX on the other hand is posting a handsome gain of 1.3% thanks to a strong rebound in commodity stocks, financials, and consumer staples (mostly the grocery stores…have you checked out the price of meat, fruit and vegetables?).

Of course higher bond yields help bank, insurance companies (they make more money on higher credit spreads) and our versions of Savings and Loans (Home Capital and Equitable Group) plus Power Corp and a local favorite Canadian Western Bank.

And this week Corporate earnings played a key role in supporting a number of companies in both Canada and the US. That trend continues next week, albeit at a much slower. Retailers will be front and center including Macy’s and Walmart (investors will be keying in on online sales growth) plus Home Depot on Tuesday, Target and Lowes on Wednesday and Ross Stores on Thursday.

Perhaps more importantly, investors will likely key in on Building Permits on Tuesday, and Leading Indicators on Thursday plus the FOMC minutes from last month.

Lastly a shout out to everyone who is sponsoring me on our Power to Be Mt. Denali charity drive this weekend. In a moment of weakness I once again joined the Ocean Wealth team in support of this great charity that helps people with emotional, physical and mental disabilities get out into nature. Hopefully I will be at the office moaning and groaning Monday morning.

Stay Safe and Happy trading.

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