Short note this week. Forget all the noise and look at the data.

 

short term positives

 

• It appears interest rates may have peaked.
• It appears the US dollar may have peaked (The US Dollar dropped after Trump took office in 2017).
• It appears crude oil may have peaked.
• The yield curve has normalized.
• US banks and tech stocks are having blowout earnings.
• S&P 500 Chart looks like it wants to break out in the short term (See Chart Below).
• US small cap stocks appear to be cheap.

 

short term negatives

 

• President Trump’s economic policies can be abrupt and unanticipated
• 5 largest companies in the US represent 29% of the S&P 500.
• China’s economy appears to be struggling.
• Tariffs are potentially inflationary and bad for both Canada and the US.
• US large caps stocks are not so cheap.

 

Overall, we think that the market still wants to go higher. This is a short-term view and could change very quickly based on the current events in the US changing rapidly. For now, enjoy the ride!!

 

 

I have also included the latest article from our CIBC Economics team entitled “Green shoots and storm clouds”

 

As always, if you have any questions, please feel free to give us a call.

 

Have a great weekend.

 

Milan