To my clients:
It was a down week for North American stock markets with the Canadian TSX finishing down 1.4%; the U.S. Dow Jones Index down 3.0%; and the U.S. S&P 500 down 2.7%.
Miniscule update this week as I’m sure readers are becoming weary of the constant talk of inflation and the battle being waged to tame it. Unfortunately, the reality is that this continues to be THE force driving markets. So rather than rehashing all that I’ve said in recent months, I’ll simply say that data released this week mirrored the Consumer and Producer Price data of last week which showed an up-tick in inflation in January. However, the caveats that I wrote of then (namely that non-current housing and shelter costs are distorting the official data) apply to the data releases this week as well. To that I’d add that there was a spike in energy prices last month that has already receded (along with declining commodity prices generally). Bottom line: I continue to believe the inflation battle has already been won, but the Federal Reserve will likely continue raising rates somewhat more.
That’s it for this week. 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
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