Canadian Blue-chip Industrial Forum - The Launch Pad - Canadian Blue-chip Industrial Forum - InvestorVillage
Canadian Blue-chip Industrial Forum
This is a semi-private group. You are free to browse messages, but you must be a member of this group to post messages. Join This Group

Group: Canadian Blue-chip Industrial Forum   /  Message Board  /  Read Message


Rec'd By
Authored By
Minimum Recs
Previous Message  Next Message   Post Message   Post a Reply return to message boardtop of board
Msg  68970 of 69198  at  1/22/2021 9:16:16 AM  by


The Launch Pad

Richardson Wealth - Connected Wealth
Daily market commentary
The Launch Pad
January 22, 2021
Click here to sign up for the Launch Pad

After making fresh new highs yesterday, markets appear to be taking a step back this morning. There wasn’t a lot of good news on the earnings front last night with both IBM and Intel slipping pre-market. It seems to be a common occurrence for these two legacy tech heavyweights. Bond yields are lower, and the U.S. dollar is for the first time this week. The stronger dollar is putting pressure on most commodities, with oil and gold trading lower.

So what’s behind investor concern this morning? More sellers than buyers is one refrain that never seems to get old. Concern appears to be stemming from fears about tighter regulations and extended restrictions in Europe and Asia. The British pound weakened after Prime Minister Boris Johnson said the U.K.’s third lockdown could last into the summer. President Biden also warned that the U.S. could face up to 100,000 more deaths over the next few months. Quite a tally to add to the already 400k+ dead.

Shares in Europe are lower after Germany cut its forecast for economic growth. European Central Bank President Christine Lagarde says the eurozone economy risks returning to recession if a decline in fourth-quarter output persists into 2021. Her remarks come as the ECB keeps policy broadly on hold, with bond buying continuing and interest rates on the main refinancing operations. The EBC is worried that the decline in the fourth quarter will travel into the first quarter of 2021 due to the extended lockdowns across many countries.

Wall Street frets as an Elizabeth Warren ally takes a key consumer protection role. A revitalized CFPB could focus on bank fees, payday lenders, and student loans. U.S. regulators have largely been sticking their heads into the sand for the past four years, but they are now getting a new lease on life. The nomination of Rohit Chopra to the CFPB is a signal from the administration that they are now back into action.

97 year old Charlie Munger is still making headlines. In a shareholder letter for the Daily Journal Corporation which he is also the chairman, Warren Buffett’s right-hand man flags a ‘speculative frenzy’ in the stock market and bemoans the lack of bargains.

Diversion: Their noses paid the bills. Then Covid took their sense of smell As many as half of Covid-19 sufferers lose their sense of smell or taste. For master sommeliers and professional bakers, it could spell the end of their careers
Connected Wealth™
Tactical model
(% equity weight)

Our tactical fund is designed to complement your existing holdings to minimize portfolio volatility. To learn more, please click here.

The latest
Market Ethos

Continued Warming to Emerging Markets - NEW
Optimistic Start
Investor lessons from 2020
2021 Outlook

Sign up for the Market Ethos mailing list.
Connected Wealth™
Tactical Primer

Some years it really pays to be tactical, and 2020 was certainly one of those years with multiple all-time highs and a very deep multi-year low. Of course the hard part is how to be tactical. The Purpose Tactical Asset Allocation Fund / ETF is a quantitative rules-based portfolio best used as a sidecar strategy to add a tactical component to a portfolio. The main goal of Tactical is to get defensive quickly when markets turn negative, providing a stabilizer for the overall portfolio, while still capturing reasonable upside in rising markets. The asset allocation can range from 100% equity to 100% fixed income / cash. In the Primer we share our models, sensitivities, how and why we developed the strategy, analytics on what kind of market it works best, and what kind of market it does not work as well.

To learn more about how Tactical Asset Allocation can help your business please enjoy our most recent Tactical Primer authored by Craig Basinger.

Company news

Costco has been a holdout on the grocery curbside pickup trend and they have decided to test it out in a few stores in New Mexico. A fight over a proposed law requiring tech giants to pay publishers for news has caused Alphabet to threaten to shut down their search engine in Australia. Intel Corp's new CEO stated that they will outsource more chip production in the coming years, particularly to Taiwan Semiconductor Manufacturing Co. Auto manufacturer, Volkswagen held up pretty well during the pandemic posting a $12.2 B profit with the company stating the main reason being resilient demand in China. It seems as though Schlumberger's revenue slump may have ended, Q4 revenue of $5.53 billion just beat analysts expectations and is the first Q over Q increase in revenue since Q3 2019.


It seems the reflation trade is taking a pause, which has uncovered just how many markets have overexposure to the thematic. Commodities fell across the board this morning, marking the largest observed drawdown in a month; at the time of writing, NYM WTI Crude futures were down -2.8% to US$51.62/bbl while ICE Brent Crude futures were down -2.7% to US$54.59/bbl. It seems the reflation trade is taking a pause, which has uncovered just how many markets have overexposure to the thematic. Goldman expects the crude market to tighten in the next two years on the back of Biden’s administration delaying the lifting of Iran sanctions and restrictions on the North American energy industry. Speaking of which, Iran began ramping up their oil production and expects to reach ~3.8mn bpd, pre-sanction levels, in a matter of months. Delays from the U.S. in reconvening on the Iran nuclear deal would therefore imply that Iran’s exports would likely remain moderate in the second half.

Base metals got their hats handed to them this morning, but gold is down especially; at the time of writing, the spot price for the yellow metal was down -1.6% to US$1,840.59/oz. Silver, meanwhile, fell -3.2% to US$25.10/oz. Despite this, ETFs poured into silver as their holdings rose +1.79mn oz in the last session. This puts YTD purchases at ~24.5mn. In copper news, Chinese smelters may win higher treatment charges in 2022 as supply of concentrate from overseas picks up strongly.

Fixed income and economics

The European Central Bank did as expected and kept the status quo at its first monetary policy meeting of the year yesterday. The benchmark deposit rate was maintained at -0.5% and the quota for bond purchases under the Pandemic Emergency Purchase Programme (PEPP) remains at €1.85 trillion. Nonetheless, officials at the ECB stated it would readily recalibrate the envelope if needed while reinforcing the overarching commitment to an ultra-accommodative monetary policy stance throughout the duration of the pandemic. The EUR appreciated on the margin and now sits at 1.2163 against the greenback and still near its 52 week high. Unlike North American central banks, the ECB has not outright declared a need for inflation to run hotter than the targeted 2% level and that has kept a lid on bond yields across the region. Year-over-year headline CPI inflation stayed at -0.3% in December, while core inflation remained at a very muted +0.2%. Note that higher consumer prices have effectively been non-existent for the past several years and the reality is that the ECB has already exhausted its policy toolkit. While it will continue its easing programs for the duration of the crisis, it’s unlikely the European banking system can lower interest rates further. The onus thus shifts on fiscal authorities to utilize the European Recovery and Resilience Facility to address any incoming demand shortfall (with yields across the curve to stay low relative to the rest of the world as a result).

Chart of the day


Quote of the day

Facebook just sounds like a drag, in my day seeing pictures of peoples vacations was considered a punishment.

– Betty White

     e-mail to a friend      printer-friendly     add to library      
| More
Recs: 3     Views: 0
Previous Message  Next Message   Post Message   Post a Reply return to message boardtop of board

Financial Market Data provided by