Cardinal Update – September 2019

Don’t Fear a Recession When You Have a Quality Portfolio:  The “R Word” has been cropping up as of late, especially since the U.S. 2 year and 10 year yield curve inverted briefly. When you add this signal to the trade disputes, slowing global growth and various geopolitical events, it certainly raises the risk of a recession in the next year or two.

It’s not yet a done deal as employment remains strong, inflation is low and economic growth, while slowing, is still positive. There are also some unusual forces including the search for positive interest rates, central bank quantitative easing, flight to quality and aging demographics that are pushing longer-term interest rates down. But ignoring the warning signs can be perilous.

Click here to read more:  Cardinal Update – September 2019

Cardinal Update – August 2019

What’s Weighing Down the Banks – Over the past year, the equal-weighted average total return of the Big Six Canadian banks has underperformed the broader TSX index.

Some of this underperformance if due to broader industry concerns, while the balance relates to name-specific concerns that have dragged down total returns.

Within the industry itself, Canadian housing, interest rates, and credit are the main areas of focus.

Click here to read more:  Cardinal Update – August 2019

DM – Q2 Portfolio Commentary

The cost of money and the price of stocks – The summer quarter began with North American markets having fully erased their steep decline of late-2018 and principal benchmarks reaching new highs in the process. We’re not aware of anyone predicting such a powerful start to the year, one which saw the S&P 500 post its best first half in more than two decades and the Dow log its strongest June in 81 years, though we do recall several experts calling for continued trouble and, in more than a few cases, the full market’s outright demise.

Click here to read more:  DM-Portfolio-Commentary-Q2- 19

Cardinal Quarterly – April 2019

MARKET OUTLOOK – After falling close to 20% in December 2018, most developed markets have experienced a V-shaped recovery and are approaching record highs. A change in interest rate policy from Central Banks has probably been the biggest factor behind the change in sentiment. Coming into the fourth quarter of 2018, the Federal Reserve seemed intent on pushing short term rates higher to guard against higher inflation in 2019 and beyond. However, inflation has remained weak, as it has for most of the past decade, bolstering the argument for continued low interest rates through 2019.

Click here to read more:  Cardinal Quarterly – April 2019