Over the first quarter of 2017, it seemed as if three things were in the news and influencing markets more than any other: Trump, Trump and Trump. From picks to fill cabinet posts, to a nominee to the Supreme Court, to Oval Office infighting to Russia, China, North Korea, and Syria. The second quarter of the year was much the same. The Supreme Court nomination was made and confirmed. Mr. Trump and Mr. Putin are scheduled to meet, things still seem to be a little tense with China and North Korea and Syria continue to present problems.
It looks as if the Fed will hike rates again, and surprising to many, there is much speculation that the Bank of Canada will do the same. We did not expect that move from the BoC until 2018, but recent trading in the Canadian dollar would suggest that a rate hike could be imminent. While the CAD is currently trading a bit above our predicted trading range of 73 to 76 cents, we believe that any hike by the BoC has already been priced in. Market volatility has increased and seems to have settled at a higher level than was seen six months ago. This will likely continue until investors feel a greater sense of certainly about the intermediate term.
I have said before that I very much doubted that, for the most part, Trump’s pipe dream initiatives would ever see the light of day and that seems to be coming to pass. When a president’s party controls both the House and Senate, and he cannot seem to get much done in terms of legislation, one would have to believe that that president is in for some tough times in turning his campaign promises into legislation.
While one cannot really make a case that markets are cheap, there are still some companies trading at reasonably attractive prices. Our managers, in general, have become a bit more cautious and in most cases have raised cash positions in their portfolios.
The price of oil has improved, and most observers feel it will be higher by the end of the year, with some price targets as high as $65 per barrel.
President, HG Partners Limited
Director, Private Client Group &
Senior Financial Advisor,
HollisWealth Advisory Services Inc.
This article was prepared solely by Howard Goodman who is a registered representative of HollisWealth Advisory Services Inc. (a member of the Mutual Fund Dealers Association of Canada and the MFDA Investor Protection Corporation). The views and opinions, including any recommendations, expressed in this article are those of Howard Goodman alone and they are not those of HollisWealth Advisory Services Inc.
HollisWealth is a trade name of HollisWealth Advisory Services Inc. ™Trademark of The Bank of Nova Scotia, used under license.
HG Partners Limited is an independent company. Scotiabank companies have no liability for activities outside of HollisWealth.