Happy Friday from BMWM!
Major markets sold off this week following hawkish comments from the US Federal Reserve’s Open Market Committee (FOMC). The Fed raised rates in the US by 75bps on Wednesday, as anticipated. However, the takeaways continue to reverberate around tightening financial conditions. Quarterly earnings remain in focus this week, with a number of companies reporting better-than-expected results. It is important to note that as financial conditions tighten, the global economy slows down, record profit margins compress, and eventually corporate earnings are likely to exhibit weakness. As a result, we are keeping a close eye on any earnings revisions issued by companies we own, and the impact it may have on the broader market. Again, we anticipate further volatility in the stock market over the short term as investors come to terms with evolving geopolitical influences, supply chain woes and the tightening credit environment. Over longer periods, we remain confident in our process and positioning.
The Current Account (click here to read) features Joe Biden threatening a windfall tax on oil companies “profiteering” from the Ukraine war, Ontario introducing a back-to-work legislation as 55,000 education workers threatened a strike, Shanghai Disney closing down due to COVID - and locking the visitors inside, and Air Canada recording its first quarterly operating profit since 2019.
News for this week includes eight Vancouver restaurants winning a Michelin star. The restaurant guide’s first-ever list for the city included also 12 Bib Gourmands (meaning good food at a moderate price) and 40 “recommended” eateries, for a total of 60 restaurants covering 19 types of cuisines. Michelin began giving one to a maximum of 3-star ratings around a century ago; only 137 restaurants around the world have a three-star rating. Did you know that the invention of the Michelin Star rating coincides with the invention of the automobile? The aim of the guide was to create a demand for automobiles and therefore, Michelin tires.
Taylor’s word of the week is “chiffonade” which is a French cooking technique to finely cut herbs or leafy green vegetables (including basil, sage, mint, spinach, lettuce) into thin strips. For example, high-end and potentially Michelin star restaurants use chiffonades as garnishes in pasta, pizza, salads, and more.
Have a wonderful weekend,
Brenda, Matt P, Taylor, and Matty