Chart of the Week

The Consumer Price Index hit a 4-decade high in April as a combination of the reopening of the U.S. economy, a sharp drop in prices last April and a surge in used car and airline prices fed into inflation:

COVID-19 Update

Global cases now exceed 160 million with fatalities now approaching 3.4 million. Daily new cases are now in a clear decline pattern; although, still running at more than 700k/day (they were more than 900k/day in late April.

The Good News

Many regions are now seeing a marked decline in new cases:

Israel has seen its case count drop to below 40/day, while its fatality rate is averaging about 1/day. Canada looks to have finally turned the corner; although, we still have a long way to go over the next several weeks. Meanwhile, the EU and especially the US are approaching levels not seen since last summer and may be close to seeing an Israel-like decline in new caseloads.

The Bad News

India remains the global hotspot for new cases with a new Indian variant of the virus that has caused many countries to cut-off travel to and from India. There may be a glimmer of hope, however, as the 7-day moving average of new cases seems to have finally peaked:

Market and Economic Update

It was a topsy-turvy week for the stock market with higher than expected inflation data causing a sharp selloff early in the week. Things settled down as the week progressed with both Thursday and Friday seeing good gains; although, not enough to offset the weakness earlier in the week. We remain of the view that while the market is likely to be somewhat uneven in 2021, the year is likely to see strong gains both in Canada and the U.S. While this has played out so far year-to-date, we expect markets to be higher at year-end than they are today; although, the journey is unlikely to be a straight-line.