To my clients:
It was a mixed week for North American stock markets with the Canadian TSX finishing up 0.1%; the U.S. Dow Jones Index up 0.7%; and the U.S. S&P 500 down 2.0%.
After a meatier than usual update last week, I’ll offer up a short missive this week reiterating a message delivered to discretionary clients in my quarterly review letter sent this past Wednesday. That message is that with rate cuts imminent – U.S. markets are pricing in a 100% probability the Fed will cut in September, and Canadian markets are pricing in a 90% probability of a second cut by the Bank of Canada next week - the narrow market leadership of the so-called “Magnificent Seven” (Amazon, Apple, Alphabet/Google, Meta/Facebook, Microsoft, Nvidia, Tesla) has significantly broadened with Canadian dividend-payers and more staid non-tech names finally enjoying the tailwinds I’ve long anticipated. Discretionary client portfolios are purposely diversified amongst these growthier sectors (four of the seven Magnificent Seven stocks are held by clients) as well as the referenced staid industries (with especially positive recent performance being seen in the following client holdings: Johnson and Johnson, United Healthcare, U.S. Bancorp, and Union Pacific in the U.S.; and Brookfield Infrastructure and Element Fleet Management in Canada). Proper diversification will always be a key feature of portfolios I manage for discretionary clients, and it’s gratifying to see these efforts paying off as intended.
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
Toll Free: 1.844.665.9900 │Email: nick.scholte@rbc.com
Visit Our Website: www.nickscholte.ca
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