06 May 2019 Genus Quarterly Review Q1
2019 started with a big reversal in equity markets as the Fed deviated from their current rate hike path to a more dovish stance. The first quarter saw companies that underperformed last year lead the way, as companies with strong fundamentals lagged the markets. In short, the reversal was a low volume rebound as markets rose in anticipation to positive outcomes in the US-China trade talk and Brexit. In contrast to equity markets hitting new highs, there continues to be strong outflow out of Equities and into Bonds and because of this, we remain defensively positioned. Looking at Canada’s political landscape, we will see the competition ramp up for this year’s election as Alberta’s recently elected conservative party will put pressure on Trudeau and the Liberals to get a pipeline constructed before the election. The heightened political uncertainty in Canada leaves the dollar more susceptible to downside risks.