Gordon Reid's Top Picks: April 7, 2022
BNN Bloomberg
Top picks from Gordon Reid, president and CEO, Goodreid Investment Counsel
Gordon Reid, president and CEO, Goodreid Investment Counsel
FOCUS: U.S. equities
MARKET OUTLOOK:
The whole world is on edge and in a state of disbelief as the horrific accounts and images come out of Ukraine. Inflation continues to be a headline item as it becomes evident that the residual effects of supply chain disruptions and decades of under investment in our workforce are going to be more than tailings. COVID just will not go away and continues to disrupt life, the economy, and markets. And to top off the list of worries the market is digesting, central bankers are becoming more hawkish and signaling that interest rates are going higher, faster.
The resulting market action in the first quarter was volatile with a capital V. From beginning to end, the S&P 500 index was down 4.9 per cent. But from the beginning of January to the start of March, the index fell 13 per cent, before recovering 11 per cent into the close of the quarter.
There have only been 11 times since the Second World War that witnessed an intra quarterly decline and advance of the equity market of greater than 10 per cent. The Bespoke Investment Group provided some interesting analysis of likely future market action by analyzing the historical record. Notably, one quarter later, the S&P 500 index was higher 10 out of 11 times and a year later, it was higher all 11 times.
