By Justin Turner CIM, DMS®, CFP®
I am back from my vacation, and looking at the charts it
appears I didn’t miss much, with the TSX being almost exactly where it was when
I left.
May has historically been the start of a period of weaker stock
market performance, and considering the run up in stock prices we have seen
over the last few years now would be as good a time as any for May to once
again signal the beginning of weaker markets. Equities have indeed started the month of May slow,
slightly down for the most part. However, at this point there hasn't been
anything to indicate that a major sell-off is looming as gold has been flat
even with the issues in Ukraine, and market volatility as measured by the VIX
has also been low so it appears to be business as usual for the time being. Nevertheless, it does feel that the market is at least taking a breather
which in the grand scheme of things is probably healthy.
Here in Canada, energy related names have been hit hard over
the past week and it remains to be seen whether this signals not only the end
of the sector’s outperformance but perhaps even the end of Canada’s
outperformance compared to US markets that we have been enjoying thus far in
2014. Small corrections are generally healthy as they tend to attract new
buyers which will help fuel the next rally, so as long as things don’t get out
of hand Canadian markets could continue to outperform throughout the year.
