Jason Mann's Top Picks: March 31, 2022
BNN Bloomberg
Top picks from Jason Mann, co-founder and chief investment officer at EHP Funds
Jason Mann, co-founder and chief investment officer at EHP Funds FOCUS: North American equities
MARKET OUTLOOK:
It’s been a volatile quarter for markets overall with the double whammy of a hawkish U.S. Fed, and the invasion of Ukraine. Bond markets have seen their worst peak-to-trough sell-off in decades, and most equity indices have seen meaningful pullbacks before rallying furiously into the end of the quarter.
Canada has been a relative winner, with its direct exposure to commodity markets, which have moved sharply to the upside on supply concerns.
Government policy is set to make these commodity shortages worse. The Pandora’s box of stimulus cheques that was opened during the pandemic is being used again to offset expensive gasoline. Of course, paying people to buy more gasoline at high prices will only result in higher prices, but the populist appeal is strong, and we expect to see it continue.
With yield curves now flattening, there is increased talk of recession. The yield curve has an enviable track record of predicting slowdowns, but the timing after an inversion is less clear. We do think there is a real risk that the Fed is hiking rates into an economic slowdown. Whether or not that slowdown results in a recession or not, markets may find it tough to make much headway.
