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November 2020 - Monthly Update


Hi,
 
Trust this note finds you well.
 
Your portfolio gained in November. You remain with positive performance in 2020 and over the last twelve months.
 
After a two month pause, the stock market rally resumed in November and was one of the best months ever for stock markets in the United States (U.S.).
 
U.S. stock indices continue to outperform Canadian. Participation expanded to include an important yet left out sector of the economy: Banks. This move began around the same time as positive vaccine news was announced.
 
Our view is that this is not the start of a new trend in leadership. A better vaccine arriving faster than expected would lead to fewer bankruptcies.  For banks, this means not only smaller losses but also that the billions of dollars of provisions set aside for these losses should be enough.
 
Most bank stocks are still down this year. November’s jump higher has helped to reduce their losses and in some cases produce small gains.
 
It is a good sign to see other sectors (like banks) join the rally that began in April (lead by technology and followed by health care and transportation)
 
The positive trends and our investments that align with those trends (working from home, 0% government interest rates, etc.) remain in place.
 
With every passing day we get closer to a new cycle of economic growth in North America.
 
Our investment strategy remains sound. You remain in a strong position financially.
 
The view from Brian Belski, BMO’s Chief Investment Strategist:
 
“After two straight months of declines, the S&P 500 climbed to multiple all-time highs in November… marking the best performance for the index since April. The equity rally was largely driven by a number of positive vaccine developments… with resilient corporate earnings and the removal of election uncertainty also providing support. And while the pandemic and the excessively binary investment decisions, and lack of process and discipline that came along with it, are unlikely to fade in the coming months, we remain optimistic heading into 2021 as the economy and society slowly transition back to normal…We expect the bull market to roll on next year, but investors should be prepared for the believability factor to once again be called into question even as earnings growth and the economy continue to improve… After the TSX posted its second consecutive monthly decline in October, it rebounded… in November and is now just 4% shy of a new all-time high. Indeed, the growing realities of vaccines and therapeutics to combat the pandemic, and continued monetary/fiscal stimulus, certainly provided a base of support for higher stock prices. However, while this news is certainly a step forward in the process, we believe we remain well off a full return to normal and the market is likely to continue to suffer bouts of volatility in the months and quarters ahead. That being said, fundamentals continued to improve during the month.” Portfolio Strategy – December 2020. BMO Capital Markets.

 
-          Stocks in your portfolio that made a new 52 week high this past month: Accenture*, Qualcomm, UnitedHealth*

-          Stocks in your portfolio that made a new 52 week low this past month: None
 
-          The Loonie gained two cents versus the US dollar to $0.77 (a two year high)
 
Thank you.

We wish you all our best,
 
Ian, Gab & Kaitlyn



* This specific security is covered under the research of BMO Capital Markets. For a full list of company specific disclosures keys please visit https://research-ca.bmocapitalmarkets.com/Public/Company_Disclosure_Public.aspx or ask your BMO Nesbitt Burns Investment Advisor for a copy.