Michael Hakes' Top Picks: December 7, 2022
BNN Bloomberg
Top picks from Michael Hakes, senior portfolio manager, The Murray Wealth Group
FOCUS: North American and global Stocks
MARKET OUTLOOK:
The Federal Reserve has done all the heavy lifting it needs to do, but they continue to talk a very hawkish game. We are already seeing many signs that the most aggressive rate increases in memory are taking effect. M2 (Money Supply) growth has moderated after the massive COVID stimulus. The PMI (Purchasing Managers Index) for both Manufacturing and Services is now below 50. The CPI and Core CPI have peaked and are coming off the summer highs. Personal savings rates, which historically have been in the 5-8 per cent range spiked to 26-30 per cent over the pandemic. These have now fallen back to only 3 per cent, well below historical averages. The excess savings, or cash cushion, which amounted to almost $2.3 trillion led to a surge in demand as the economy reopened. Consumers are burning through these savings as they face higher prices across the board. Housing costs, one of inflations biggest components, are on the cusp of easing. Rent and OER (Owner Equivalent rent) which was surging over the summer will moderate into next year.
