June is often seen as a month of growth, renewal and reflection. It marks halfway through the calendar year, providing a natural moment to assess progress and set intentions for months ahead. June is a month to celebrate our achievements, and perseverance for the future months with renewed optimism and energy.
Earlier this month, the RBC Canadian Open was held at the Hamilton Golf and Country Club. Held annually, this tournament brings together top golfers from around the world showcasing their skills on Canadian soil. Below is a photo of Kieron and our client beside the RBC Canadian Open Trophy.
As we cheered on the athletes, we reflect on the parallels between golf and wealth management, strategy, precision and long-term vision are keys to success in both fields.
Market Update
The U.S. Federal Reserve chose to hold policy rates steady for the seventh consecutive meeting, leaving its key policy rate at a two-decade high. The Fed’s decision was widely anticipated, with investors instead focused on any guidance on future rate cuts and any updated economic projections. Chair Jerome Powell acknowledged that substantial progress has been made on inflation over the past two years, while emphasizing the committee needs to see more progress before considering any interest rate cuts.
In other parts of the world, the Bank of Canada and the European Central Bank both kickstarted their easing cycles in June with a 25 basis point reduction in interest rates. The decision to begin cutting rates was data driven - the deterioration in economic growth, rising unemployment and easing inflation backdrop was enough evidence for the central bank to begin cutting. We recognize rate cuts won't spur an immediate rebound in Canada's Economy - as the pivot is more akin to easing off the monetary policy brakes rather than stepping on the gas. The BoC is still considering inflation risks and has highlighted pressure points, including global oil prices, domestic housing demand and wage growth as key areas to follow. In the latest print, Canada's CPI ticked higher in May which is the first significant upside surprise of 2024 for Canada. We expect given this news the BoC will put more focus on the June CPI numbers ahead of the July meeting.
In contrast to Canada, the U.S. economy has remained resilient throughout. Recent economic releases continue to show an economy that appears to be on the path to a soft-landing, where growth slows enough to bring inflation back to more appropriate levels without a significant rise in unemployment. That type of outcome would be the preferred one for financial markets as it would promote some easing in future financial conditions (ie. lower interest rates) and a potential broadening in corporate earnings growth. Nevertheless, we believe that we remain in a window of time where the range of potential U.S. economic outcomes remains wider than normal given the significant change in interest rates that occurred over the past few years. This year the U.S. equity market continues to display impressive strength, driven by the large cap technology sector. We are paying close attention to market breadth and sentiment for any signs that a more defensive posture should be considered across portfolios. We recommend holding a market weight exposure to the equity markets and have been diligent in rebalancing portfolios back to long term asset allocations as the markets have rallied.
Healthy Aging
As you enter new life stages, you may have new concerns about how you can stay well, protect your security, remain independent, and help your family. Talking about these concerns with the people you care about, and with your team at Hayes Vickers Private Wealth can help. There are many resources out there to turn to, but Why it's important to talk to us about healthy aging breaks down eleven key points to think about as you enter another life cycle. The article looks at everything from, how to protect yourself when things start to change to, building your circle of trusted people, to staying safe online. Cyber security is again on the rise and becoming increasingly prevalent. It's never been more important to ensure you educate yourself and your family on how to stay cyber safe. This checklist will help you learn how to protect yourself, your family and your digital assets. Openly talking about your questions and concerns with those you trust will help you. Hayes Vickers Private Wealth is committed to ensuring we create a unique plan with you to ensure you feel comfort around your wealth. If you would like to schedule a meeting with us to review your plans, please click here and we will book an appointment.
Long Weekend Ahead
Canada Day is Monday!
Celebrating Canada Day in the Ancaster / Toronto area offers a plethora of fun activities for everyone. You can start your day by going for a hike through the beautiful trails of the Dundas Valley conservation area, where you can immerse yourself in nature and enjoy stunning views. Afterwards you can visit the Ancaster Farmers market for a great place to sample local produce. Celebrating closer to Toronto, you can visit Nathan Philips Square where you can enjoy live music, food trucks and family-friendly activities over the long weekend.
Wishing everyone a happy and healthy kick off to summer!
Hayes Vickers Private Wealth