Emerging markets soar while North America takes a breather

By Justin Turner CIM, DMS®, CFP®

Emerging markets rebounded strongly this week after experiencing a slow start to 2014 as investors seem to be less concerned with the Fed or with growth in China and have started to see opportunity in heavily oversold emerging market stocks.  Most emerging market indices have enjoyed gains between 5 and 10 percent over the past week alone.  In contrast, North American markets have continued to move sideways as investors have sought opportunities elsewhere.

It would not be a surprise to see the rest of 2014 be a good one for emerging markets as well as commodity driven markets such as Canada.  The US market may continue to perform well, but perhaps at a more moderate pace than what we have seen over the last 5 years.

Janet Yellen Spooks Markets

By Justin Turner CIM, DMS®, CFP®

In her debut as head of the Federal Reserve Janet Yellen unnerved investors as she hinted at rising interest rates sooner than the market had been expecting.  Initially this sent markets into a tailspin but stocks have since recovered and the S&P 500 appears poised to end the week at yet another all-time high.  The same cannot be said for gold which has weakened substantially after the last few days, and may very well signal the end of the rally that began just before Christmas.  The Canadian dollar has also fallen below 90 cents since the news, and could be headed for more weakness in the near-term.

The stock market has proven to be resilient and has rallied in the face of just about every piece of bad news that’s been thrown at it.  The S&P 500 may very well attempt to test the 2000 mark before Summer hits, exactly three times the low it reached at the height of the financial crisis.

Markets starting to cool off as investor optimism starts to wane

By Justin Turner CIM, DMS®, CFP®

The rally in equity markets has cooled off, at least for the time being.  Usually a correction like this would be viewed as healthy thing after the rally we have enjoyed over the last few weeks, but with some of the less than stellar economic data we have seen combined with the ongoing issues in Crimea it feels like it may be awhile before the market gets back to the highs we saw last week.

Of course this 5 year bull market has surprised us time after time with its resilience, and this time may indeed be no different, but it feels like a significant correction could take place in the not too distant future.  Whether that is in 2014 or whether that is still a few years off remains to be seen.

US Stock Markets soar to new heights, but will it last?

By Justin Turner CIM, DMS®, CFP®

US stock markets have continued their ascent, reaching new highs on four consecutive trading sessions. The S&P looks poised to challenge the 1,900 level, almost 3x the level it reached at the height of the financial crisis in early 2009.  It now ranks as one of the top 6 bull markets in history in terms of length as well as duration.  Despite this amazing rally, it has a long way to go before matching the strongest bull market in history.  That honour goes to the bull market that started after the market crash in 1987 and ended with the burst of the dot-com bubble, a market that returned a whopping 582% and lasted over 12 years!

With the mixed bag of economic data we have been seeing combined with escalating geopolitical tensions, one has to wonder how much more room this market has to run.  It might not be time to go to the sidelines necessarily, but being in a well-diversified portfolio of blue chip names could partially shelter you from some of the larger losses that could be incurred if the market does happen to pull back.  We continue to prefer writing calls on our equity holdings as opposed to an outright buy and hold strategy at this point.