Not much has changed since last week. Plus, today is a holiday!

Interest rates and inflation have remained relatively steady. Bonds barely moved lower in price. However, gold jumped up a little higher. Stocks continue to have more momentum than bonds. Having said that, the economy doesn’t appear very strong.

Comparing various asset classes, Chinese stocks (FXI) still appear the most appealing. They are slightly lower than four weeks ago, but higher than at any point before that. Hong Kong stocks (EWH) have almost as much momentum.

Canadian large caps (XIU) have just turned negative. Anyone who has geographic weightings in their portfolio should be underweight Canada. European stocks (XIN) or US large caps (SPY) may be good candidates for an overweight position.

Among US large caps, the only individual stocks that really look attractive are Amazon (AMZN), Microsoft (MSFT) and Nike (NKE). The shoe company is a new addition this week. Among Canadian stocks, the pickings appear equally slim, with just three attractive stocks: VRX, FM and AEM, just like last week.

Market Outlook May 18, 2015

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