Cardinal Quarterly – July 2022
June 2022 Market Outlook – The first six months of 2022 was the worst start to a year for stock markets in the past half-century. Clearly, the war in Ukraine and Covid lockdowns in China have not helped.
The greatest concern, however, is that central banks will raise interest rates too high and cause a recession as they combat inflation. Judging by the plummeting prices of economically-sensitive stocks, such as Paypal and Shopify, the market is now pricing in a high probability of a recession within the next year.
Click here to read more: Cardinal Quarterly – July 2022
DM Monthly Report – May 2022
INFLATION, INTEREST RATES, AND STOCKS – As everyone knows well by now, the equity market has been presented with much to worry about in a very short space of time. Paramount among concerns is surging inflation, which is almost certainly a by-product of the extraordinary conditions brought about by the Covid crisis and which is definitely being exacerbated by the war in Ukraine.
Inflation on its own, however, is not necessarily perilous for a business and companies that can boost selling prices for their products and services by more than input costs are rising may even thrive in such an environment. Instead, it’s the eventual jump in interest rates that most often trips up stock prices in an inflationary environment.
Click here to read more: DM Monthly Report – May 2022
Cardinal Capital Investment Update – May 2022
IS A RECESSION ON THE HORIZON? – David Rosenberg says if there’s one thing we’ve learned from history it’s that people don’t learn from history. One of Wall Street’s most notorious bears believes Canada is on the verge of a recession as central banks have their hands full with rising inflation.
“The trick (for central banks) is going to be to quash this inflation without creating an outright recession. That is, by far, the biggest risk right now,” says David Rosenberg, president and chief strategist at Rosenberg Research & Associates, a Toronto-based economic consulting company.
There have been 14 hiking cycles by the Federal Reserve in the U.S. and 11 of them ended in a recession, he told more than 450 people at the CFA Society Winnipeg’s annual forecast dinner at the RBC Convention Centre on April 19th. Recessions typically follow the kind of fuel and food squeeze that the world is currently experiencing, he says.
Click here to read more: Cardinal Investment Update – May 2022
Cardinal Quarterly – 2022
Market Outlook – Geopolitical and economic developments were mostly negative in the first quarter of 2022. Russia’s invasion of Ukraine has no clear end in sight and China’s COVID lockdowns in major cities such as Shanghai have slowed the world’s second-biggest economy, lowering global GDP. Inflation has continued to surge, creating expectations for further interest rate increases from central banks.
As a result of these concerns, most developed market indices fell in the first quarter. Only the S&P/TSX in Canada and the FTSE 100 in the U.K. were positive, increasing 3.8% and 1.2%, respectively. The next best-performing markets were the Japanese Nikkei 225 and the Australian ASX 200, which were down -2.5% and -2.7%.
Click here to read more: Cardinal Quarterly – March 2022
