Below is a summary of some of the relevant news items from the Capital Markets and the Economy from the past week extracted from RBC Global Insights and FactSet Research.

You can view the past four weeks’ Weekly Update in the link to my Blog.

Read my latest Smart Investor newsletter on my website. The Q2 2023 edition covers Market Review, Recession Scorecard and Focus on Bonds.

 

Markets

Market scorecard as of close on Friday June 23, 2023.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	19,418	-2.8%	0.2%
U.S.	S&P 500	4,348	-1.4%	13.3%
U.S.	NASDAQ	13,493	-1.4%	28.9%
Europe/Asia	MSCI EAFE	2,139	-1.5%	10.0%

Source: FactSet

• TSX closed lower in Friday afternoon trading, near worst levels. Most sectors down. Canadian equities declined for sixth straight session with TSX recording a 2.8% weekly drop.

• US equities weaker Friday and down for the week. S&P snapped a five-week winning streak and Nasdaq snapped an eight-week winning streak.

 

Economy

Canada

• The economy has proven more resilient than originally thought, as GDP continued to edge higher in Q1, by an annualized rate of 3.1%, after growth stalled in Q4 2022.

• Unemployment remains low, but job openings have declined, according to RBC Economics. Furthermore, consumer delinquency rates have begun to rise (albeit from abnormally low levels), and household disposable income may subsequently soften as well. Per RBC Economics, the BoC remains committed to its 2% inflation target and more rate hikes are on the table if the economy does not show significant signs of slowing.

U.S.

• According to the Global Supply Chain Pressure Index, supply chain pressures have been steadily improving since peaking in October 2021 and are now nearing their lowest levels on record—with the index going back to 1997.

• The U.S. housing market continues to show signs of recovery as May housing starts came in well ahead of expectations.

Further Afield

• A shock interest rate hike of 50 basis points (bps) from the Bank of England signals deep concern amongst the voting members of the Monetary Policy Committee (MPC), in our view. CPI inflation was unchanged at 8.7% y/y from April and, more importantly, May services inflation is ahead of the May Monetary Policy Report forecast of 6.8% y/y.

• U.S. Secretary of State Antony Blinken met with Chinese Foreign Minister Qin Gang for more than seven and a half hours on Sunday. The U.S. State Department called the talks “candid, substantive and constructive.” Qin accepted an invitation to Washington and called for “stable, predictable” relations.

 

Notes About Companies in Model Portfolio

• Telus (T) announced a strategic partnership with Australian EV charging company, JOLT, to install up to 5K public DC fast chargers across Canada, running on the TELUS network. The companies will begin installing the network of EV charging stations across Canada later this year. The stations will include TELUS' public Wi-Fi capability. Across the JOLT EV charging network, all electric vehicle drivers will be able to use their JOLT app to access 7 kWh of free charging per day, which equates to 40 to 50 km of range and 15 to 20 minutes of charge time, depending on the vehicle.

• Visa (V) announced the appointment of Chris Suh as CFO. Suh, who succeeds longstanding Visa CFO Vasant Prabhu, will serve as CFO Designate from 10-Jul until 1-Aug, when he will assume full responsibility for the role. As previously announced, Prabhu will depart the company on 30-Sep-23, after assisting in a smooth transition. Suh joins Visa from Electronic Arts (EA), where he held the role of CFO.

 

Feel free to contact me with any questions and/or to discuss investment ideas.

I appreciate the opportunity to serve you and look forward to continuing to help you accomplish your long-term financial goals.

 

Regards,

Shiuman