Insights

Friday Market Insights – Quiet markets but continued positive economic reports

Thomas Holloway and Justin Hahn's headshot with orange layer on top
Play Video
Share on facebook
Share on Facebook
Share on twitter
Make a Tweet
Share on linkedin
Share on LinkedIn
Watch our Friday Market Insights – Quiet markets but continued positive economic reports, with Tom Holloway and Justin Hahn

This week's questions

[00:00] : Intro

[00:00:18] : Can you kick us off with what happened this week in markets that were as interesting to you?

[00:01:37] : So Justin you mentioned, the services and the manufacturing versions of the PMI.

[00:02:28] : Both crypto markets and the continuing kind of saga of the meme stocks such as EMC and GameStop. What’s the latest there, Justin?

[00:04:31] : So today was non-farm day. What did you see there Justin?

Thomas Holloway: [00:00:04] Hi, folks, and welcome to the Genus Friday Market Insights, today’s June 4th. And my name is Thomas Holloway. I’m a portfolio manager and I’m joined by Justin Hahn, the Genus macro portfolio strategist. Can you kick us off with what happened this week in markets that were as interesting to you?

 

Justin Hahn: [00:00:23] Yes. So the markets this week were relatively flat and quiet as we hover around the all time high levels for a lot of the indexes. In quarter one, we saw Canadian GDP expand by about five point six percent, led by the residential investments as the housing market still remains strong there. We also saw continued strength in the US economic numbers with services PMI as they’re coming in at record highs, which is very positive for the markets. And we also saw manufacturing PMI bounce up as well above the 60 above the 50 expansionary mark, this would mark the 12th straight month of expansionary territory for the PMI numbers. We also saw the job numbers released today a bit stronger than a bit weaker, sorry than expectations, but the markets actually took that positively, which will cover a bit later. In addition, we also saw the OECD increased global growth estimates for twenty twenty two, up to about four point four percent from 4.0 percent, and also increasing Canada’s GDP estimate to about six point one percent and three point eight percent for this year and next year.

 

Thomas Holloway: [00:01:28] Great, good summary. Thank you. So kind of quiet in the market prices, but information continuing to come in around the reopening and such. So Justin you mentioned, the services and the manufacturing versions of the PMI.

 

Justin Hahn: [00:01:42] Yeah. So the recent services PMI as this week, were actually the strongest on record and kind of illustrates the pent up demand that’s been going on due to all the covid Lockdown’s last year. We also still believe there is more upside on the service side, at least as we head into the summer months and Travel and leisure pick up as well as vaccination efforts continue in the US, manufacturing has also rebounded, still not as high it was a couple of months ago. But it is, like I mentioned before, the 12th to 12th straight time that the reading has been above 50 since April of last year.

 

Thomas Holloway: [00:02:17] Great. But let’s start off maybe with a topic that’s still super interesting for us to watch, but I guess away from the exactly what Genus in. And that’s on both crypto markets and the continuing kind of saga of the meme stocks such as EMC and GameStop. What’s the latest there, Justin?

 

Justin Hahn: [00:02:37] Yeah, we’re seeing a similar situation as we saw in January and February during those two peaks where we’re seeing a lot of these heavily shorted companies like EMC and GameStop saw up with retail investors coming in. Actually, I think I saw today’s report showing that AMC actually owned by about 80 percent retail investors, which is quite a large portion. Part of this cost could be due to the lackluster performance we’ve seen in the crypto currencies for cryptocurrency have crashed quite a bit after Chinese and US regulators began to step in. And also with Tesla pausing its Bitcoin purchases due to the environmental impact, this also points out the amount of excess liquidity we have in the markets with all the pent up demand from last year and all of the extra stimulus given through stimulus checks and other methods floating around in the markets. These stocks are more treated as trading vehicles, more of day trading vehicles than actual fundamental investments. So we kind of are straying far from it and not really looking at it too much, but following the news around it. We also saw EMC today come in and say they’re giving out free popcorn to all the investors that they have. So, I mean, if you think about it, any company that would give out free popcorn, you would probably expect the stock to go up as well.

 

Thomas Holloway: [00:03:56] Yeah, it’s a fascinating idea. It’s like, you know, you could buy one share for I think it’s around fifty or sixty dollars, that’s a little bit pricey for a bag of popcorn. But you can almost justify the share purchase just on that one offer. And you know, the other thing that came out this morning that Justin mentioned was the the monthly non-farm payrolls report. So this is really the one, the big the biggest monthly series that any macroeconomist looks at to understand the health of the US economy. And in turn, maybe the global economy comes out early in the morning on the first Friday of the month. So today was non-farm day. What did you see there Justin?

 

Justin Hahn: [00:04:34] Yeah. So the US job numbers this month came in slightly below expectations actually for the second straight month. But we still saw unemployment rates still move down to about five point eight percent, although unemployment still remains strong. Economists expectations, we believe, have been a little bit too overoptimistic about the pace of the job growth. This actually became quite a positive for the markets. The markets actually shot up today, especially in the tech sector after the weaker job numbers. This is mainly due to a lot of the fears on investors mind currently. Is the Fed increasing rates a little faster and begin tapering their large balance sheets, but with a little bit of a slowdown in the job data, investors are more optimistic about a longer run there and a more cautious Fed, despite also the increase in volatility we’ve seen in the equity markets. The bond markets have actually been trading quite range with the US ten year at about one point five to about one point seventy five percent. And it’s been like that for the past few months. So we haven’t really seen too much new signals from the bond market.

 

Thomas Holloway: [00:05:38] Ok, so we’re going to leave it there. Beautiful end of the week here in Calgary. I think it’s the same in Vancouver for weather. So I hope clients enjoy the weekend if if that’s able to hang in there. If you as always, if you have more questions or things you’d like to hear us chat about, reach out to your portfolio manager or reach out to me if you like, or just in and with that. Thanks again for your business. And we’ll talk to you soon.

 

Justin Hahn: [00:06:04] Thanks everyone.

 

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on email
Email

Client impact

“Graduating from a big bank to Genus was one of the best financial steps we've ever taken. Genus has delivered reliable asset growth despite our moderate risk tolerance. As our financial security has grown, we've also been the beneficiaries of a great client experience. The company's communications have been consistently transparent and informative, including educational webinars and a well-designed web portal where we can track investments daily. Most importantly to us, our portfolio manager has always responded swiftly and thoroughly to our questions and requests. ”
Martin T.
"Having relatively diverse financial goals and needs, along with a slight reticence regarding the stock market, Genus skillfully addressed all of our concerns, and put together a truly exceptional plan: Fossil free funds and a diversified investment portfolio, check; An effective Impact investment portfolio that coincides with our hopes and dreams for a better world, check; Professional advice and assistance to create a donor advised charitable fund with immediate charitable receipts for tax purposes, check. Returns? Way beyond our expectations! We even had some fun along the way and certainly enjoyed an incredible two-year start to what will be a satisfying long-term relationship with Genus."
Marc B.
“I love the service I get at Genus.”
Chris H.
“Leslie and I were fellow board members when we met twenty years ago. For the last ten she has been thoughtful in the construction of an investment strategy for my family and is executing the strategy as planned. The team at Genus has met my expectations and are a pleasure to deal with.”
Bob Q.
“For over 15 years, I have provided selection and performance evaluation of multiple investment managers for a significant family office. Leslie and Genus have been foundational for me in my role. I have always found Leslie and her colleagues to be insightful and proactive, and found the performance of their portion of the portfolio to be well above benchmarks. And they have been a great pleasure to work with.”
Douglas H.
“Genus is a very innovative firm. I am pleased to invest in their Fossil Free and Impact strategies that help me invest in line with my values.”
Marnie C.
“Great team of professionals. Excellent website and reporting. Responds to inquiries promptly. Very pleased with the process of changing from another company to Genus as well. Kudos.”
David L.
“Genus consistently provides a good, clearly explained, comprehensive picture of the general economic and financial situation, along with an excellent account of the investment decisions made in relation to this. Genus’ equally strong concern with clients’ questions and requests for further information is also a very important part of the service it provides.”
Allan S.
“Back in 1992 when I found myself at fifty with a substantial amount of money to invest, I knew just one thing — that I didn’t want to contribute to tobacco companies, arms manufacturers, or oil. But over the ensuing years the options for socially responsible investing have become far more sophisticated and I’m very happy that this is a big part of the Genus approach. I also very much appreciate the long-term relationship with my portfolio manager, Mary Lou.”
Ann P.

As seen in

Are you ready to make an impact
with your investments
?