By Justin Turner CIM, DMS®, CFP®
After a rough couple of weeks, North American markets finished last week on a strong note. The TSX was virtually flat while the S&P 500 managed to rise 0.3%. Bonds have been performing well and in many cases made new 52 week highs last week. The bond rally and resulting lower yields have been partly responsible for causing concern among investors.
After a rough couple of weeks, North American markets finished last week on a strong note. The TSX was virtually flat while the S&P 500 managed to rise 0.3%. Bonds have been performing well and in many cases made new 52 week highs last week. The bond rally and resulting lower yields have been partly responsible for causing concern among investors.
The flight to fixed income which has caused yields to fall,
despite the fact that the Federal Reserve indicated that rates may go up soon,
is a potential warning sign that this equity market rally might be running out
of steam and that the economy may not be as strong as many had thought.
The weaker equity markets and bond buying could also be due to all of the
geopolitical tensions and could be a simple case of profit taking and investors
heading to the sidelines until some of these issues are resolved.
Whatever the reason, a small market correction is healthy and necessary if the
market is to continue making new highs in the coming weeks and months.
