Market & Economic Environment: Global equities added to their stellar first-quarter gains in April, with the TSX Composite, S&P 500 and Nasdaq Composite reaching new highs in the month to complete one of the fastest market rebounds on record. The TSX rose 3.0%, bringing its gains for the year to 15.8%, led by the Consumer Discretionary (+7.0%), Information Technology (+6.4%) and Financials (+5.2%) sectors, while Real Estate (-2.8%) and Materials (-2.5%) lagged the index. The S&P 500 advanced 3.9% in April for year-to-date gains of 17.5%, while the Nasdaq surged 4.7% for YTD gains of 22.0%. (Data Source: FactSet)
Our Strategy: Investor sentiment has been buoyed so far in 2019 by dovish central banks, easing trade tensions and solid corporate earnings. Last month, the Bank of Canada abandoned its rate-hike bias, bringing its policy outlook in line with the Federal Reserve and other major central banks. With the TSX near record highs despite signs that the Canadian economy is slowing down, investors appear to be unconcerned about this divergence and remain optimistic about growth prospects even as the housing market slows down markedly. With the month of May marking the start of the six-month “Sell in May and go away” period when stocks have traditionally floundered, the Portfolio Management Team (PMT) intends to deploy cash balances in client accounts opportunistically upon any market pullback.
Please contact any member of the PMT if you have any questions or concerns regarding your accounts.
