In this month’s market review, our Chief Options Specialist, Jason Ayres, reflects on the May market conditions. Now that we are halfway through the year, let’s look back at a few events that shaped the market
- Biden won the election and inventors believed that administration would do what it takes to help the economic recovery.
- The market extended its rally accordingly.
- Volatility within the sectors of the broader market resulted in a rotation away from higher-value technology stocks to stocks with more sensible valuations whose prospects will improve all the economy reopens.
- By the end of quarter, the S&P 500 Index has outpaced the tech-heavy NASDAQ, the first time since the forth quarter of 2018.
- At the moment, markets seem unconcerned with the long-term effect of rapidly rising government debt levels on both sides of the border.
- The word of the day is TRANSITORY. Expectations suggest short-term inflation bumps relating to supply chain disruptions will be short lived.
- Bond and currency markets have had a different take on matters. Bonds ended the quarter lower year-to-date.
- The strong Canadian dollar is a result of the increase in crude oil and other commodity prices, as well as a more hawkish Bank of Canada.