Investment Commentary

Going into 2022, many observers (including us) had a positive view on the economy and markets in general. This was predicated on a receding pandemic – which appears to be playing out. On today’s economic horizon, a different view emerges.

Growth was expected to be well above pre-pandemic levels as a more normal environment brought down high inflation levels as the year progressed. A robust outlook was anticipated for corporate earnings growth, and thus, the stock market. The Russian invasion of Ukraine has caused a partial reset of this rosy economic view.

In this quarter’s commentary, our investment team shares insights on these and more:

• How the economic outlook has quickly changed
• The Canadian equity market is an exception to global equity weakness
• The effect of interest rate hikes on monetary conditions in the U.S.
• Ripple effects of the Russia-Ukraine war on global markets
• The U.S. Treasury yield curve and its implications for interest rates and the economy

Click here to read the commentary or
download a PDF copy by clicking here. 

The latest President’s Update from Kevin Dehod features Scott Blair, Chief Investment Officer, who talks about our first year as a consolidated investment team. What worked? What didn't work? And what are we working on in 2022?

One advantage of writing a monthly market commentary is that you end up with a library of real-time thoughts that you can later return to and learn from. In reviewing our 2021 archives, we found that despite strong year-end results, 2021 was full of surprises. It was the best and worst of times.

Although 2022 may not bring us fully back to normal, we think it will be another big step towards normalcy, which is positive for the economic outlook.

From our dedicated investment team, this quarter’s commentary brings you these insights and more:

• Lessons learned in 2021 and what we can expect in year 3 of the pandemic
• Which strong-performing Materials and Financials companies topped our list
• Why we’re optimistic about travel, easing of supply chain issues and labour market conditions
• Measures China has taken to improve profitability in 2022
• COVID-19 and inflation. Are either of these permanent?

Click here to read the commentary or
download a PDF copy by clicking here. 

Early in the pandemic, we were shocked to see record demand for nice-to-have items despite being in the throws of a huge recession. In retrospect, we know this was caused by the rise in average household incomes and savings due to generous government programs, while outlets to spend those dollars fell as travel and other services were – and still are – limited.

In this stage of our economic recovery, our attention turns to how the pandemic has affected supply chains globally, and what impact this is having on our markets worldwide. 

From our dedicated research team, this quarter’s commentary brings you these insights and more:

• Supply chain disruption – short and long-term impacts on companies and consumers
• Rising fertilizer prices around the world and M&A movement in the Canadian equity market
• What potential rate increases and easing of supply chain bottlenecks could mean for our U.S. portfolio
• The unravelling of Evergrande and its affect on Chinese banks and companies 
• How the Fed and Bank of Canada are positioned for their inflationary policy goals

Click here to read the commentary or
download a PDF copy by clicking here. 

The heatwave that Canadians recently experienced is somewhat of a precursor to what’s shaping up to be a scorcher of a summer from an economic standpoint. Provinces are demonstrating forward momentum in easing COVID-19 restrictions, which is key in the hand-off from government support programs back to the real economy.

With 67% of Canadians having received at least one dose of the vaccine as of end of June (ranking us as world leaders), fully vaccinated individuals will soon catch up. This will result in even more restrictions being lifted, which will unleash many economic catalysts that we’re looking forward to.

In this quarterly commentary, our research team shares insights on:

• What’s signaling a hot economic recovery 
  
• What the energy sector rebound means for our Canadian portfolio 
  
• Our favourable U.S. portfolio performance and the ongoing debate of growth vs. value, inflation vs. disinflation
  
• How Italy is benefitting from the €750B European recovery package
  
• Inflation concerns and higher interest rates as we continue on the growth path

Click here to read the commentary or
download a PDF copy by clicking here. 

To go along with the video, is our written Outlook Commentary where we discuss how companies prepare to ramp up business due to pent up demand, low interest rates, and higher savings levels. As more of the population gets vaccinated, we expect strong economic growth once COVID-19 restrictions are lifted.

In this commentary, our Research Team analyzes trends in four markets and touches on several key themes including:

• An increase in M&As in Canada due to low interest rates and aligned shareholder interests 
• The rotation from defensive to cyclicals in the U.S., as expansion advances 
• A steepening yield curve beneficial for cyclical companies and Europe and the impact of shortage of semiconductor manufacturing capacity
• The Fed’s Average Inflation Target changing the game and opportunities in inflation hedges for Fixed Income investors

Click here to read the commentary or
download a PDF copy by clicking here. 

To complement this discussion, our research team is also providing insights on various topics through a written Outlook commentary

• Key developments in the reflation trade and opportunities for economic growth in the international markets
• The disproportionate recovery of the U.S. market, the risk of high expectations and the compelling risk-reward opportunities found in the banking sector
• Benefits of an active investing approach and the reasons we initiated a position in a Canadian telecom company for the first time in a decade
• How fixed income bond yields are expected to grind higher and how our portfolio is positioned in an environment where interest rates continue to normalize

Click here to read the commentary or download a PDF copy by clicking here.