Markets ended the week with strong growth on Friday as bond interest yields fell even as the Fed Chair tried to warn he might possibly not be done raising interest rates yet. (The market did not believe him).
On Friday, the S&P 500 was up 0.6% and Toronto was up a hefty 1.1% on the day.
lululemon was up 4.4% (there was likely an analyst upgrade, it reports earnings next week)
AutoCanada was up 4.4%. (I expect continued volatility here, I have seem some anecdotal reports that car dealers in general are quiet with few sales and their inventory is piling up. It may take manufacturer incentives to move more vehicles off the lot. With the high interest on floor plan – inventory – financing I would have thought dealers should be cutting inventory but that did not seem to be the plan for AutoCanada in its Q3 report.)
Canadian Western Bank was up 3.8% getting back above $30 for the first time in about 18 months. Hopefully their Q4 report next Friday will at a minimum support this increase. But positive or negative surprises are always possible.
Over the past few days I updated my detailed analysis of the valuation of the S&P 500. My analysis may in fact be overly detailed. I concluded that it looks moderately overvalued but there is a lot of uncertainty in the valuation in both directions depending on various assumptions. And it may be that the out-sized impact of the 7 or so largest companies is making this valuation exercise even more uncertain.