Cardinal Quarterly – October 2018
MARKET OUTLOOK – The Federal Reserve has signaled strongly that short term interest rates will move higher, probably by at least three more hikes to 3%, and now that NAFTA worries have been put aside, we expect that the Bank of Canada will not be far behind. We expect long-term rates to move higher as well, probably over 3.5% on the U.S. 10 year.
Jamie Dimon, the CEO of JP Morgan (one of our holdings) said he is surprised when people can’t believe that interest rates are rising. We share this sentiment. U.S. economic growth has been accelerating, unemployment is at record lows, and higher oil combined with tariffs are starting to push supply chain costs higher. All of these factors put pressure on the Central Banks to raise interest rates.
Click here to read more: Cardinal Quarterly – October 2018
DM Monthly Report – October 2018
‘GOODBYE Q3’ – We bid farewell, not just to the calendar days of the third quarter, but to all of the equity gains accumulated during the period. Concerted selling in the second week of October precipitated a sharp decline in major markets and emphatically broke an extended run of calm that had seen the S&P 500 go 74 straight sessions without a single one closing up or down by more than 1%. Even worse, the plunge came just as envelopes were sealed on our Q3 client reports in which our commentary hailed the market’s steadfast resilience in the face of so many potential selloff catalysts! (ugh) As investors grapple with this dose of downside, a few points worth noting:
Click here to read more: DM-Monthly-Report-Oct-18
Cardinal Update – September 2018
Canadian Oil & The Trans Mountain Pipeline – On August 30th, the Federal Court of Appeals (FCA) released a negative ruling pertaining to the Trans Mountain Expansion (TMX). The FCA found two major deficiencies in the report from the National Energy Board (NEB): The NEB did not include project-related tanker traffic in its review and they failed to consult Indigenous peoples and First Nations as set out by the Supreme Court. The FCA has effectively halted all construction and progress on TMX. In order for the project to proceed, there are a number of different options.
Click here to read more: Cardinal Update – September 2018
DM Monthly Report – September 2018
EMERGING MARKETS: worth the bother? Occasionally, we’re asked why the equity portfolios we build for clients don’t include allocations to emerging markets (EM). To put it plainly, we’ve never felt that the potential reward of investing in these regions compensates for accompanying drawbacks. Some of our reservations with respect to EM investing include: Legal framework, Accounting practices, Forex, Cost…..
Click here to read more: DM-Monthly-Report-Sept-18
