Brooke Thackray's Top Picks: March 21, 2022
BNN Bloomberg
Top picks from Brooke Thackray, research analyst, Horizons ETF
Brooke Thackray, research analyst, Horizons ETF
FOCUS: Seasonal investing and technical analysis
MARKET OUTLOOK:
The stock market is being driven by macro factors such as interest rates and inflation. The Russia-Ukraine war continues to add inflationary pressures and uncertainty in the stock market, which has been struggling since the beginning of 2022, well before the start of Russia’s invasion. The conflict is causing additional disruptions in the stock market. The Federal Reserve and the Bank of Canada should have been raising interest rates in 2021. High inflation has pushed the central banks into a tightening cycle; they are being forced to raise rates as the economy is showing signs of slowing down. This will probably result in a volatile market as investors adjust their expectations to the pace at which central banks raise their interest rates.
The stock market is still in its seasonally strong six-month window when, on average, it tends to perform well from late October to early May. It is possible this year that the stock market could transition into weaker performance before early May. In previous years, in the summer months when the stock market tends to be weaker on a seasonal basis, the Federal Reserve has typically initiated its monetary stimulus policies. This year, investors should not expect the Federal Reserve to come to the rescue if markets falter in the summer months as it will be in a tightening cycle.
TOP PICKS:
