Sideways For Now

Hello everyone,

We hope everyone has remained safe since our last letter. We continue to work from home during this time out of an abundance of caution for the health of our colleagues and our families. We are watching for developments on the health front to provide further visibility for when we can return to normal operations. Until that point we remain fully operational from the home office.

We have seen quite the comeback in the market since the March lows and so far the stock market has performed in line with what we have expected.  Lately the upward trend has stalled in response to increased fear headlines in the news stemming from the rise in the infection rate as things open up. However, in our view this is to be expected and it does not change our overall outlook.  Things will never be truly normal again until a vaccine is developed.

Until a vaccine timeline comes into view we believe that we will see ups and downs for the stock market. We expect that this will result in a sideways movement into July. In July we expect to see vaccine results from several clinical trials that are currently going on and we think this is what the market is waiting for. There are many vaccines that are showing promise and experts are widely hinting at success. If success in the trials is achieved this will give the market a timeline as to when the pandemic will end.  We think this will be the catalyst for a sustained move higher for the financial markets.  We also think that this will expand the market advance. Up until now the majority of the gains have come from companies that benefit from the shutdown.  In the next phase we expect that gains will accrue to investments that benefit from a return to normal scenario.

Until a positive catalyst happens we are going to continue look for opportunities to gradually put cash to work in high quality income investments.  

If you have questions for us feel free to reply to this email or give us a call and we are happy to have a discussion with you.

Please continue to stay safe and healthy.

Best,

Tchabushnig Group.

 

This communication has been prepared by Alan Tchabushnig and expresses the opinions of the authors and not necessarily those of Raymond James Ltd. (RJL). Statistics, factual data and other information are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. It is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a member - Canadian Investor Protection Fund.

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