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Tag: Canadian economic news

Weekly Update for the week ending May 10, 2024

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Part of my investment philosophy is to let winners run rather than selling early to lock in gains. This approach has been beneficial with stocks like Nvidia (NASD: NVDA) and Shopify (TSE: SHOP). However, I reduced my holdings in each after they came to represent over 40% of Portfolio 1 and Portfolio 3, respectively, to manage increased volatility.

On the flip side, this strategy has sometimes resulted in missed opportunities for greater profits, as was the case with Illumin Holdings (TSE: ILLM). After surging from C$2.00 to C$32.00 per share in less than a year, it plummeted to C$1.64. Although I made a profit, I could have made more had I sold earlier. ☹

While I generally prefer to let winners run and even expand my investments in them, I recognize there are times when it is wise to sell part of a stake, especially in smaller, more volatile companies.

Weekly Update for the week ending May 3, 2024

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This past week, the US Federal Open Market Committee (FOMC) convened to set monetary policy, most notably the US benchmark interest rate. These decisions have a profound influence on investors in both Canada and the United States. Generally, lower interest rates can lead to higher stock prices and a calmer market environment, and happier investors 😊. Conversely, higher rates can introduce volatility and encourage a shift towards more conservative investments.

Beyond investor sentiment, the FOMC’s decisions on the US benchmark interest rate can significantly influence the actions of the Bank of Canada (BoC) with regards to Canada’s interest rate. The relationship between these rates is critical because a substantial difference can have several repercussions on the Canadian economy.

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Weekly Update for the week ending April 26, 2024

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For the past three weeks, economic news—covering economic output, labour markets, and inflation—has dominated market movements. This focus shifted this past week as over 40% of the S&P 500 companies reported their earnings. Strong reports, especially from the largest companies, could likely sustain the market’s upward trajectory. However, if earnings reports are underwhelming, the markets may continue the recent pullback.

Additionally, key updates such as the US economic growth data and the Federal Reserve’s preferred inflation measure were released. Ideally, the Fed wants the economy to stay strong while inflation cools down.

Let’s see how this shift toward corporate performance and the latest economic updates impacted the markets over the last week…

Weekly Update for the week ending April 19, 2024

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April has not been the easiest month for us investors. We have seen losses across the board, with each week bringing its own set of challenges. The first week the markets dipped following strong US labour data, suggesting the economy might be too warm, which could deter the US Federal Reserve (Fed) from lowering interest rates. In the second week, higher-than-expected inflation data further soured the mood, heightening concerns about persistent high prices. This past week, comments from various Fed officials have added to market jitters. Fed Chair Jerome Powell emphasized that the current 5.5% interest rate could stay in place “as long as needed” to manage inflation, a stance echoed by other officials who see no rush to cut rates.

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Weekly Update for the week ending April 12, 2024

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This past week was pivotal for investors. The latest US inflation numbers, measured by the Consumer Price Index (CPI), could swing the door open for a possible US interest rate cut in June – if it indicated that inflation was on the decline. Conversely, flat, or rising inflation rates could extinguish any hopes for a rate reduction in June.

In this week’s edition of our series for new investors, I will cover a few of the risks beginners should be aware of when they start investing. Alongside the latest US inflation report and what it meant for investors, let’s see what else happened this past week….

Weekly Update for the week ending April 5, 2024

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Navigating the world of investing often mirrors the emotional rollercoaster experienced by hockey fans as the season nears its end and the draft lottery looms. The dilemma? To wholeheartedly support your team’s victories or, paradoxically, hope for losses if it secures a superior draft spot. This dichotomy is strikingly similar in the realm of investments, where economic news can simultaneously herald positive developments and trigger investor apprehension. Take, for example, the recent labour report from the US: It showed job growth and wage increases surpassing expectations—a testament to a thriving economy and a win for the workforce. Yet, for those keen on seeing interest rates decline, this was a setback. Rising wages, after all, can exacerbate inflationary pressures. The statement by a Federal Reserve official that it is “much too soon to think about cutting interest rates” effectively quashed any hopes for an imminent rate cut, epitomizing the scenario where robust economic health can dampen prospects for those favoring lower interest rates. ☹