Perspective Matters

U.S. equites reached new highs again in August. The Federal Reserve’s announcement by Chair Jerome Powell had a calming effect on nervous investors as the call for tapering too aggressively could derail progress at a sensitive time, sighting a desire to see further progress in the labour market. It was a welcomed boost to investor sentiment as the markets held ground amidst the turmoil in Afghanistan, hurricane Ida and the Delta Covid-19 variant.
 
Financials, especially diversified financials like Goldman Sachs, Blackrock and Morgan Stanley, performed well as revenues for major investment banks returned to their former heights and in some cases surpassed pre-pandemic levels. Communications services, like Google, Facebook and Netflix were also amongst the strongest performers after announcing strong earnings at the end of July, while Energy companies lagged the index, even though energy prices remain at 3-year highs.
 
Natural gas, posted a strong gain in August; the only sector in the energy space to gain during the month. Unpredicted and up about a third since early-June, U.S. Henry Hub natural gas prices have been soaring this summer to over $4.00 per MMBTu. Prices this time last year during the crux of Covid-19 were just $1.85. The August NYMEX gas contract expired at $4.04, the highest monthly expiration since December 2018.

We’ve raised our year-end price targets for the TSX and S&P 500.

 

Watch for our Outlook post later this month with more details or email us for a copy of our full market commentary. 

 

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