Clear and Convincing (TWTW – May 23-27, 2022)

Clear and Convincing … what the FED wants to see in terms of inflation coming down …

While the latest FED minutes reinforced the notion that a succession of 50 bps are on their way, it also suggested the possibility of a pause – should incoming data suggest that inflation pressures are abating. In other words … EVEN MORE data dependent than we’ve ever been …

That said, on balance, clearly the focus remains on the FED realizing that having been caught badly behind the 8 ball, they have NO CHOICE but to voice strong determination to right the situation in order for inflation expectations not to become entrenched in market participants’ minds.

the ECB – according to Lagarde in no rush to raise rates.

Davos – Soros suggesting that Europeans have some leverage against Putin, as the Russian dictator, while using nat gas a a weapon – shutting down supply to several nations thus far … has got one inherent problem to face: an inability to redirect flow to other customers, respectively storage constraints at their end. Good point – and hopefully something that serves to improve the pricing situation.

SNAP – Company’s stock got hammered this past week, following disappointing results, causing broad weakness across SM stocks.

Canadian banks – Q2, 2022 reporting season underway. Last hurrah before more difficult quarters ahead, should economy soften, respectively higher rates take a bit out of Real Estate and harm consumer? RY: $ 4.25 Billion; TD: 3.81 Billion; Scotia: $2.75 Billion; BMO $4.76 Billion;  National: $893 Million; CIBC: $1.65 Billion.

National Bank – talks about RE correction underway => click HERE!

PCE inflation – latest reading serving to reassure markets => Click HERE!

Overall – strong bounce after 8 weeks of a market correction … a sharp bounce in an ongoing bear market? How much longevity will the bounce have, respectively when do we resume to the downside … Interesting summer in perspective …

Latest weekly numbers: Sectors; Thematic; Factors; Regions:

  • Strong across the board rebound this past week on the part of Technology in particular (NOT In Canada …), with interestingly, Canadian Energy also up strongly

  • Across the board rebound in Thematic space as well – how long for? how far does this go from here?

  • Value and Fundamental continuing to post stronger results than broad Canadian exposure.
  • Dividends lagging a bit this past week

  • hardest hit = larger bounce … US, and by extension world

YTD numbers to May 27, 2022: Sectors; thematic; factors; regions:

  • Energy continuing to outpace every other sector and exposure

  • a long way to break even … and unlikely we’ll get there any time soon … but nice reprieve …

  • With Canadian Energy continuing to lead, value and fundamentals poised to continue outperforming traditional market cap

  • Overdue bounce … how long for; how much higher, if at all?