Stéphane Rochon, CFA, Equity Strategist; Richard Belley, CFA, Fixed Income Analyst; Russ Visch, CMT, Technical Analyst; Eric Yoo, Associate; Ernad Sijercic, Associate Today, we are reversing our April 2022 equity weighting cut by taking 5% from cash and putting it in Canadian stocks. The stock market has generally been quite weak since that time – especially in the U.S. – but with our conviction that inflation has peaked and a clear indication that the Bank of Canada has paused interest rate increases (soon to be followed by the Fed), we feel this is an opportune time to put money to work in the TSX which has a high weighting in attractive sectors (see Figure 2) and a relatively low valuation to boot. In particular, the China economic “reopening” is a big deal which is not fully priced in yet in our opinion, with several important economic indicators marking a “V-Bottom” (Port Container and Subway Traffic, Air Travel, Purchasing Managers’ Manufacturing and Services Data, etc.). With both fiscal and monetary stimulus now working together, China’s GDP expectations have been raised to the 5% range for the year.
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Do not hesitate to give either of us a call at 416 359-7565 or 416-359-7564 or email Sharon Kubicek or Alisa Carli if you have any questions respecting your portfolio and the prevailing investment, economic and political issues at play today.
Kubicek Carli Wealth Management Group