Transitory, transitory … (TWTW – June 7-11, 2021)

Is it any wonder some fear inflation could be a problem …

This latest Chinese inflation reading: the highest in 12 years (9% ouch).

That said, interestingly, US 10-year yields have actually been retreating lately … suggesting fewer worries here, respectively greater acceptance of that “transitory inflation” notion.

Will that “pan out”? Well … we are going to find out … sooner or later, aren’t we? In the meantime, US May CPI came with a very high reading of 5% (highest since 2008) as well => Click HERE!

Yet, again, bond yields don’t look to have reacted much to these (contrary to what happened between early February and Mid-April (ending at 1.454% on Friday). => summer doldrums?

For his part, one famous Michael Burry is reported to have earlier positioned for inflation, amongst other things buying put options on TLT …


ETFs related:

Steven Hawkins, CEO of Horizons ETFs talks Green Bonds ETF with Deborah Fuhr from ETFGI => Click HERE!

Energy – thank you Eric Nuttall (NinePoint Partners) “A net-zero oilsands production facility? Think of the implication” FP piece, in which you highlight that it’s high time Canadian Energy producers weren’t vilified any longer! => Click HERE!

Canada – Global Oil supplier of choice = what an amazing aspirational target to have! Let’s go CANADA!

and lo and behold … not sooner was this article written than Canada’s Oil Sands producers announced a concerted effort in that direction 🙂 read more = Click HERE!

Bitcoin – OMG: first off, gets hammered by US Feds managing to claw back Bitcoin ransom payment re: Colonial Pipeline hack … and then … of all place El Salvador does … what? Decide it will be the first country in the world accepting Bitcoin as legal tender … WOW …

Weekly sector performance:

  • Utes, REITs, Healthcare coming back on = … related to bond yields not being an issue at the moment?

A look at May 2021, and year to the end of May as far as iShares Canada ETFs (ex RBC iShares/ex former Claymore iShares):

  • Gold stocks leading the performance charts last month, as earlier noted – who would have thought?
  • Energy, Materials, India, Value, Dividends and financials all doing well; China … not so much … (but notable performance differential between iShares China and BMO China ETFs)

  • Energy rocked it last month, and June started pretty much where we left off … doesn’t hurt that Oil is over USD 70 WTI, and that at these price levels, as pointed out repeatedly by NinePoint Partners PM Eric Nuttall, a lot of Canadian producers could basically retire all stocks within 5 years …
  • and that RBC raised its Oil Price forecasts, hiking them by 12% and 13% (WTI and Brent) => read more: Click HERE!
  • Notable as far as bottom performers to the end of May, that aside from bonds … only CHINA made the list.  A China, which this week was scolded by the G7, and which responded in kind by pretty much suggesting the G7 wasn’t ruling the world (which is true, obviously …). That said, NOT great at all to read that Western Nations believe China is using forced labour in global supply chains including in the agricultural,  solar, and garment sectors => Click HERE! to read more. Evidently, this doesn’t square off with ESG goals!

Which … interestingly, got me to read “The China Opportunity” on BlackRock’s website => Click HERE!

I am sure there are opportunities aplenty there, and obviously, investors cannot afford to ignore the world’s second-largest economy. That said, I for one would like to know more about the quantifiable elements of what is going on there as far as ESG; I’d love to see democracy respected with regards to the country’s dealings with Hong Kong, as well as Taiwan; and … I am very much intrigued as far as what the results of the Phase 2 COVID-19 Origins study including in China will reveal. On that note – happy to report I got my second vaccine shot this past week.

BMO – Recognized at 2021 Responsible Investment Association Leadership Awards => Click HERE!

Horizons ETFs – some risk ratings adjusted upward => Click HERE!

Hope you are all well! and enjoyed a wonderful “less quarantined” week-end, now that Ontario has eased many restrictions as of 12:01 am Friday, June 11, 2021 🙂