The market took a hit last week as news of a new coronavirus in China made headlines. This coupled with more tariff talk and lower consumer sentiment, causing some investors to run for cover.

What is most interesting is the fact that the Mag 7, which has been the only thing going up over the last 2 years, is not leading the charge. After a 2-year siesta, consumer staples, health care, real estate, and financials have woken up and are leading the way.

As you can see from the chart below, the market is broadening out. The Mag 7 is not the only game in town and that is a good thing. This is what a historically normal market looks like, and it will benefit investors with well-diversified portfolios. Obviously, Trump’s sporadic policies and tariff talk will cause volatility – however, it is good to see a more diverse set of companies participate in the upside. This is what a healthy market does. Rotation is change (and people don’t like change), but this rotation will provide ample opportunity to make some money. The next few months will be interesting!

I have also included a piece from our CIBC Economics team entitled “Seeking diversification: Can Canada reduce its dependency on the US?”

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

Have a great weekend.

Milan