Market Review: April 2016

Materials Sector Leads April Charge

April was a very active month for the markets, with last month’s rally continuing until last Friday. Gold and silver made new 52-week highs, oil crossed above the $45 per barrel mark, and briefly the Canadian dollar crossed the $0.80 versus the US dollar. As it has been since January 1st, the commodity space has been the story so far in 2016 and by all accounts should remain a focused theme for our markets, due to its enormous contribution towards the valuation of our currency.

The most notable developments this month have been the following.

Canada‍

• Recent well performing sectors are Basic Materials, Energy, Utilities and Industrials.
• Price of gold and silver made new 52-week highs on the very last market day in April.
• Canada is one of the leading markets in 2016 and has gained about 3.5% from end of March levels mainly because of the continued increase in oil prices.
• An average price of $53 per barrel of oil means the world’s 50 biggest publicly traded companies in the industry can stop bleeding cash.
• Canadian dollar continues to strengthen vs. the U.S. dollar crossing the $0.80 at one point.
• Canada’s largest pharmaceutical company Valeant continues to be in turmoil even as significant changes are being made to its business strategy and the CEO and CFO are outgoing.
• Transcanada Corp, the country’s No. 2 pipeline operator, reported better than expected quarterly profit.

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United States‍

• Recent well performing sectors are Utilities, Energy, Telecommunications and Basic Materials.
• Overall, the US economy did not have a stellar month as 1st Quarter GDP growth rose at 0.5% versus the estimated 0.7%, which is the slowest pace in the past 2 years.
• A US retail sales and jobless claims came in lower than expected.
• Despite retail sales, Ford profits surged as SUV sales hit all-time record.
• Apple posts first decline in revenue since 2007 as declining iPhone sales impact their net income.
• Uber overtakes rental cars among business travelers in North America.
• Coca-Cola profit tops estimates as new drink sizes boost sales.
• The Federal Reserve met last Wednesday. As expected there was no rate hike and the “Fed” will continue to be cautious as they consider future rate hikes.
• Puerto Rico is on the verge of defaulting on their debt obligations and putting their $3.7 trillion economy into turmoil.

Global

• Journalist’s co-operatively published a massive leak of documents, dubbed the Panama Papers. It allegedly revealed a network of famous, high net worth and politically exposed individuals that have been evading taxes using a consulting firm based out of Panama named Mossack Fonseca.
• Doha oil meeting ends without agreement on capping production.
• Europe’s CDP grew by 0.6 in the first quarter versus expectation of 0.4%, but inflation was negative 0.2 in April, missing expectations.
• Europe was divided again this month as concerns about the Eurozone’s financial sector is still high.
• Germany plans $1.4 Billion in incentives for electric cars.
• Barclays posts a drop in profits on falling returns at the investment bank.
• China reported exports jumped 11.5 percent year on year, the first increase since last June and well above market forecasts.
• China’s banking regulator moves to contain a rapidly growing “shadow loans” industry.
• Mitsubishi Motors says it cheated on mileage tests for 25 years.
• Japan's trade in surplus as imports drop for fifteenth month in a row.
• China’s March home prices rise at fastest rate in two years, top cities boom.

We continue to believe having a globally balanced portfolio with a focus on low volatility will help lower overall investment risk while having the ability to capitalize on investment opportunities.

Economic Calendar

Please do not hesitate to contact us if you have any questions or would like our team to review your investment strategy.

Best Regards,

Konrad, Justin and Merriel

Echelon Wealth Partners - LK Wealth Management Group

Sources: Market Q, Bloomberg, National Bank Research, Reuters, Globe and Mail, Wall Street Journal

Disclaimer: Echelon Wealth Partners Inc. is a member of IIROC and CIPF. This document has been prepared as a monthly market update and does not contain any recommendations for any particular investment. It is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular investing strategy. Any investment decision should be based on your own risk tolerance and investment objectives and reviewed with an investment advisor. Any opinions or recommendations expressed herein do not necessarily reflect those of Echelon Wealth Partners Inc. The data used in this document is from various sources and is believed but in no way warranted to be reliable, accurate, complete and appropriate.