After taking a break, stocks appear ready to continue their climb. Bonds are also producing gains. Canadian small caps have done really well over the past few weeks, but appear to be slowing down and are starting to look riskier. Not
The yield curve is a graphical representation of the bond yield at different maturities. A normal yield curve will slope upwards, with higher yields for longer bonds. An inverted yield curve will slope downwards, with higher yields for shorter bonds.
The US Fed(eral Reserve Bank) is talking about raising interest rates. Normally, that would cause bond yields to rise and bond values to fall. But bonds continue to perform reasonably, and with stocks taking a breather, bonds appear to be
The American dollar is strengthening, compared to most other currencies. Although the Canadian dollar continues to trade favourably compared to the American dollar, this is likely related mainly to the rising oil price. Bonds and stocks are both performing well,
There hasn’t been a recent market crash, but some stocks appear to be cheap compared to their long-term valuations. Their P/E ratios are a little lower than usual, their P/B also, and dividend yields are a little higher than usual. This
Bonds and gold continue to hold up. Normally, they move opposite to the direction of stock prices, so this calls into question the recent gains by stocks. Perhaps that was a temporary movement and cannot be relied on to continue.
Of the most common investment assets, right now Canadian stocks appear to offer the most opportunity, especially small cap stocks with a value style (buying cheap). Prices aren’t particularly low compared to earnings, but earnings may be depressed and could