The Living Market Podcast

Good news: September is over

This September was a bad month, as are most Septembers, says Chief Investment Strategist for IG Wealth Management, Philip Petursson. While the economic environment doesn’t look great, there is light at the end of this tunnel. Experience tells us that the stock market usually bottoms out before the economy does and bounces back a lot sooner. And current price-to-earnings ratios suggest that there is quality to be found in the markets at reasonable prices.

What about profit?

Chief Investment Strategist for IG Wealth Management, Philip Petursson, says, when interest rates were extremely low, profitless tech companies (the “high flyers” of the COVID-19-era) could finance themselves very cheaply, so their lack of profit generation was not a problem. Now, however, with rising interest rates and a slowing economy, profitable companies are massively outperforming these former high flyers.

Crisis inflation, or is it?

Chief Investment Strategist for IG Wealth Management, Philip Petursson, says when global oil prices surged following the invasion of Ukraine, it led many to believe that commodity prices would continue to push inflation to elevated levels. Listen in as he explains that while investors and speculators get excited about geopolitical events, they rarely have a long-lasting impact on the markets. It’s therefore important to stay calm and not succumb to panic during these events.

What happens when companies buy themselves back?

Share buybacks — when companies buy back their own stock —  effectively reduce the amount of a company’s shares on the market. Fewer shares lead to more value per share, boosting the stock price and creating higher demand for the stock. Chief Investment Strategist for IG Wealth Management, Philip Petursson, explores the potential impact on the markets of the U.S. government’s proposed 1% tax on stock buybacks.

Did you sell in May and go away?

Investors who stepped back from the markets over the summer have a lot of data to digest, says Chief Investment Strategist for IG Wealth Management, Philip Petursson. He gives an update on market activity for the last few months and discusses what is likely to happen during the remainder of 2022, including Canadian equities’ strong showing, healthy labour markets and opportunities in Europe and beyond.

Sometimes words speak as loud as actions.

Chief Investment Strategist for IG Wealth Management, Philip Petursson, says during a speech last Friday (August 26, 2022), U.S. Federal Reserve Chair, Jerome Powell reminded everyone that words are also a powerful policy tool: Philip says he thinks when the speech warned of “pain ahead,” that Powell knew exactly how markets would react. And the markets did react, with vigour. Listen in as Philp explores how, through the power of speech, Powell may have influenced markets just as effectively as if he hiked interest rates.

Deconstructing the Canadian dollar.

This week, Philip Petursson, Chief Investment Strategist for IG Wealth Management, deconstructs the Canadian dollar and examines where it should be, given its historical drivers (the global price of oil and Canadian-US interest rates). Listen in as Philip explains why he continues to believe the loonie is undervalued and is likely to rise as high as US$0.83 over the next six to 12 months.  

Have we turned the corner on the market?

Philip Petursson, Chief Investment Strategist for IG Wealth Management, says this summer has seen a nice equity market rally. At time of recording, he says the S&P 500 index has staged a healthy recovery off the low of June 16, 2022 by just over 17%. And while the index is still down year-to-date, we have seen a recovery over half of the downside since the start of the year. Listen in as Philip asks whether we have we turned corner on the market in economic pessimism and seen the bottom? And does this mean it’s all smooth sailing from here?

Emerging markets were seen as a big opportunity: what happened?

Back in 2001, emerging markets (particularly Brazil, Russia, India and China) were recognized as having all the ingredients to be attractive investment opportunities. But recently, emerging markets have underperformed. Philip Petursson, Chief Investment Strategist for IG Wealth Management, explores why this happened and whether China’s stimulus plans and low valuations can turn it around.

Is the Bank of Canada willing to risk a recession to tame inflation?

Philip Petursson, Chief Investment Strategist for IG Wealth Management, says monetary policy is not an exact science. It’s more like filling a bathtub with hot and cold water to try to reach the perfect temperature. The Bank of Canada’s recent 1% interest rate hike was more like dropping a block of ice into the bathtub. Listen in as Philip discusses whether weaker economic growth may be a side effect of the BoC’s determination to tame inflation.