Happy Friday from BMWM!

 

Global equity markets are trading lower on Friday morning after a large sell-off on Thursday. Most major US indexes were down over 2% at Thursday's close, and the downward pressure does not appear to be abating today. Stocks are reacting to this week's US Federal Reserve's (Fed) announcements and heightened fears of economic slowdown. Some technical dynamics also featured this week as a large block of equity options expired on Thursday and selling pressure from algorithmic strategies put additional pressure on market liquidity. The Fed continues to push back at any attempts of a market rally, which has been the theme of this year. Our longer-term thesis remains intact, though: equities are most likely to remain volatile through 2023 while the road to recovery in the bond market appears more certain.

 

The Current Account (click here to read) features Canada’s federal banking regulator not changing the stress test for uninsured mortgages, a fashion magnate dethroning Elon Musk to become the world’s richest person, around 100,000 nurses in the UK walking off the job, and Peru declaring a 30-day national state of emergency.

 

News for this week include Canadians admitted into hospitals in 2021 logged more time in emergency departments than ever before. Nine out of ten emergency department visits for admitted patients were completed in 40.7 hours in the year ending March 31st, up from 33.5 hours in the previous year. Across Canada, hospitals are dealing with staffing issues, barriers to accessing primary care and other daily pressures. Emergency departments saw 2.4 million more visits in 2021-22 than in the prior year. The increase was especially pronounced among babies and toddlers.

 

Taylor’s word of the week is perpetuity, meaning “a bond or other security with no fixed maturity date”. For example, real estate, certain types of bonds, and stocks that pay dividends are all perpetuities.

 

Have a great weekend,

 

Brenda, Matt, Matty and Taylor