Thursday’s action saw the S&P 500 down 0.8% but Toronto was down only 0.2%.
lululemon was down 3.2%.
No surprise that markets are having a couple of down days. But look at long-term interest rates, they are still falling. (Good news for my VBAL idea by the way) The 5 year Canada bond yield is down to 2.84%. It peaked at about 3.9% three months ago. This is a big drop. similarly, the ten year U.S. treasury yield is down to 3.39%. It started January at 3.79% and had peaked a few months ago at 4.2%.
If the Fed is indeed going top keep raising rates much more and if inflation is going to be stubborn, this bond market has not gotten that memo.
Overall, while short term market movements are always unpredictable I don’t see any reason to worry about a few down days. But those over exposed to stocks can certainly consider trimming some positions. Always nice to have some cash in the investment account and for the first time in a long time we can actually get a decent yield on short term cash investments.
P.S. looking for news about the U.S. debt ceiling crisis tonight, I don’t see any news really. As far as I can see the financial markets are yawning about it so far. But maybe tomorrow the market will wake up and take notice.