May was another extremely volatile month for equity markets
S&P 500 posted its longest weekly losing streak since the dot-com bubble
Target and Walmart had weaker than expected earnings
China loosened lockdown measures- Joe Biden advised he may consider easing tariffs on Chinese goods
Canada’s benchmark S&P/TSX Composite Index was 0.2% lower in May
Decline was led by the health care sector with a loss of 25.5%
Only energy and financials managed to be in the green
Energy had returns of 7.9%
Financials had returns on 1.4%
Due to the strength of the energy and materials sector, the Canadian market has been resilient
Small-cap stocks (measured by S&P/TSX Small Cap Index) were down 2.4% in May
U.S. dollar depreciated 1.2% vs the loonie during May- this lessening returns of foreign markets from a Canadian investor’s perspective
U.S.-based stocks (measured by S&P 500 Index) declined by 1.4% in May
Biggest decline was real estate and consumer discretionary (-6.5% and -6.3%)
Energy, Utilities and financials saw gains in May of 13.3%, 2.3%, and 1.1%.
Measured by MSCI EAFE Index showed International stocks lost 1.2% in May
Emerging market stocks fell 1.3%
Canadian Investment grade bonds lost 0.1% in May (measured by FTSE Canada Universe Bond Index)
Key global investment grade bond benchmark increased 0.3%
Global High yield issues advanced 0.5%
Commodities
Natural gas had a return of 12.4% in May continuing to rally
Price of a barrel of crude oil gained 9.5%
Copper, Silver and Gold all in the red (losses of 2.3%, 5.9%, and 3.6%)
Inflation
Inflation in Canada had a 6.8% year-over-year rise in April (highest since 1991)- Largely driven by food and shelter prices
Canadian economy added 15,300 jobs in April
Canada’s unemployment rate went down to 5.2%
BOC is expected to hike the policy rate by another 50 basis points to 1.5% in June
This follows the Fed rate hike in the U.S. of another 75 basis points on June 15th
U.S. unemployment rate was unchanged at 3.6%
Largest contributors in the U.S. to rising inflation; Shelter, food, airline, and new vehicles
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