To my clients:
First an announcement: I will be taking the second week of Spring Break from March 21st to 25th “off”. That said, I’ll still be monitoring markets and will be checking in regularly, and will make portfolio adjustments if warranted. As always, Brenda will be available for any urgent needs.
It was a mixed week for North American stock markets with the Canadian TSX finishing up 0.3%; the U.S. Dow Jones finishing down 2.0%; and the U.S. S&P 500 finishing down 2.9%.
It is a short update this week, because the narrative has not changed. Volatility (i.e. the up and down wild swings in the market) remains very high; inflation concerns persist; and the Ukrainian tragedy continues. Despite this, recession risks remain low. RBC’s 7-point “recessionary scorecard” continues to flash “green” expansionary conditions across all seven measures. No yellows. No reds.
Next week the Federal Reserve will meet and release its policy statement where it will raise rates by 0.25%. Yes, I said “will”. How do I know? Because in a very rare move by a sitting Fed Chairman, Jerome Powell in recent testimony before Congress said that this is precisely what the Fed will do. In the Q&A after the policy announcement, I’d expect further color will be provided as to the rate outlook for the remainder of the year ahead. I’d be surprised if Mr. Powell didn’t dial back expectations for future rate hikes throughout the year given the uncertainty that the Russia/Ukraine situation has injected into the economic outlook.
For those clients who were unable to read the article I linked last week, I’ve again included it HERE. I really do think it is worth looking at if you are even mildly concerned about the market outlook ahead. No need to read the whole thing – just the first page or two makes the point quite well. The point being? Answer: that market volatility largely disappears if one were to look at market valuations just once per year (you know, just like your annual property assessment). That said, I and RBC will remain vigilant for recession which is the true bogey we are attempting to avoid.
All the best,
Nick
Nick Scholte, CIM, FCSI
Senior Portfolio Manager
Scholte Wealth Management
RBC Dominion Securities Inc. │ Tel: 604.257.7569 │ Fax: 604.235.9950
3200-1055 West Georgia │ Vancouver, BC │ V6E 3P3
Toll Free: 1.844.665.9900 │Email: nick.scholte@rbc.com
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Any recommendations herein are for the exclusive use of clients of RBC Dominion Securities and Investment Advisor Nick Scholte. Any other direct or indirect recipient of this email should consult with his/her own licensed investment advisor prior to implementing any investment action he/she may be contemplating.