The first quarter has come to a close and it has been a very strong one for markets. The U.S. Federal Reserve and the Bank of Canada have both held interest rates with the conversation still leading toward possible cuts. Earnings and growth for corporations have remained strong and the economic numbers have also been strong. With inflation weakening, this has all fueled stock markets to continue climbing.

There has been a lot of talk as this market rises that it has come too far too fast. I once heard this in 1995, and the market continued to rise and double until 1999. Is this the same? Time will tell. I do feel pockets are overvalued in the semi-conductor segment and a few other areas. Artificial Intelligence (AI) is in its early phases, and the excitement around this has fueled this market. I believe there will be productivity increases and more growth in the economy, and we will learn more as time goes along. Every company will use the technology and some areas will thrive, others will not. I like the areas of robotics and big legacy corporations who will become more efficient and profitable as areas of opportunity.

There are differences between a pullback and a correction. I do expect a pullback (around 10% potential), however, at this time, correcting really isn’t in the cards. This could all change with some catastrophic event, but for now we are positioning to take advantage of a pullback. I expect some of the biggest technology companies to lag going forward, and the rest of the overlooked and unloved areas to finally see some good growth.

Europe remains in a slowdown; China remains un-investible, and the rest of Asia actually has not been too bad. I do not see any interest rate decreases until the fall and, even then, it appears to be a stretch. In saying this, as long as central banks keep with this target of lower interest rates, it provides markets with a backstop and allows companies to invest in the future accordingly.