Cardinal Quarterly – January 2022
Market Outlook – Consumers Poised to Drive Market Returns in 2022 – Global stock markets hit record highs at the end of 2021, fueled by the strongest GDP and corporate earnings growth in decades. There’s no debate about the source of this growth. Since the start of the pandemic nearly two years ago, governments around the world have unleashed nearly $15 trillion in global stimulus spending to offset the negative impact of COVID-19 lockdowns. Although the benefits of stimulus spending have not been spread out evenly, consumers are poised to provide a considerable boost as they’re currently sitting on record bank deposits, lower debt and strong wage increases.
- Our outlook for Cardinal portfolios in 2022 is for returns in the 15 per cent to 20 per cent range, although they are somewhat less optimistic for the overall market.
Click here to read more: Cardinal Quarterly – January 2022
DM – Q4 Portfolio Commentary
2022 begins with much to consider – During what’s normally one of the quieter parts of the calendar for market news, the closing weeks of 2021 introduced at least three significant developments for investors to contemplate, each adding nuance to the inflation story that had already come to dominate financial headlines. First came the detection of the “omicron” covid variant in South Africa and its subsequent sprint around the globe; next was the press conference held by US Federal Reserve Chairman, Jay Powell, during which he left little doubt that the days of ultra-easy money in the world’s most important economy will soon be past; and, finally, there was the decision by a swing-vote US Senator to reject the administration’s multi-trillion dollar “Build-Back-Better” stimulus package.
Click here to read more: DM Portfolio Commentary – Q4 2021
DM Portfolio Commentary – Q3 2021
Financial stress in China adds to inflation worries – As the third quarter was drawing to a close, equity investors were served a jolt of long-forgotten volatility when the Dow dropped by more than 600 points in a single day. The catalyst for the plunge was the revelation – or at least the acknowledgement – that one of China’s major property developers was buckling under the strain of a mountainous debt load and would struggle to complete its vast array of projects. In a country where households are uncommonly levered to real estate and construction accounts for an outsized portion of GDP, this was understandably worrisome. Of particular concern in the west was the possibility that cascading property and debt markets in China would reach into our financial systems, much like the sub-prime crisis had imperilled major banks and lenders well beyond US borders just over a decade ago.
Click here to read more: DM Portfolio Commentary – Q3 2021
DM Monthly Report – Sept 2021
FOLLOWING OUR EQUITY PROCESS INTO U.S. HOMEBUILDING – During the summer, we made select adjustments to our equity mandates, trimming positions which we felt had run slightly ahead of fundamentals and adding to those which offered better relative value. Among these transactions was out first entry into the US homebuilding industry, with two names from the sector added to the DM Foreign Equity portfolio in late July.
The process that led to the purchase was the same one that underpins all of our buy and sell decisions, where ideas are generated and researched by our analytical group and then presented to the DM investment committee for discussion and voting for implementation.
Click here to read more: DM Monthly Report – September 2021
