Market and Investment Insights

June 2019

RELIEF RALLY IN GLOBAL MARKETS

A number of positives helped global markets swell during the month, the largest of which was a dovish tone from the Federal Reserve meeting. Given the broad utilization of the US dollar in global trade, many central banks must take the Fed’s actions into consideration to avoid exposing  their domestic currency to unintended fluctuations.

With the Fed announcing they could be ready for a course correction to begin cutting rates, this gives other central banks more flexibility with their policies resulting in a supportive global business environment. Additional US tariffs seem to be on hold after a meeting between President Trump and President Xi Jinping at the June G20 meeting in Osaka, Japan. President Xi agreed to send delegates back to the negotiation table after the US agreed not to impose the additional tariffs which were being threatened. In commodity markets, Brent crude oil recovered some ground as the market priced stronger demand from a potential US-China resolution. Gold rallied over 6% which may have been a result of the Fed’s
announcement mentioned above. A lower US benchmark interest rate inherently leads to a weaker US dollar, which is a boon for gold prices.

Contributors

  • The largest contributor to our Stock model was Colliers International. The stock rallied over 12% and has announced restructuring within their management team
  • Contrary to May’s sell-off, ARK Innovation ETF had a significant price appreciation in June. The ETF was up nearly 18% as tech stocks rally

Detractors

  • BMO Global Infrastructure ETF was slightly negative for the month but is still well in the black, returning over 17% so far this year
  • Waste Connections was down slightly after a report from KeyBanc analysts. We are still confident in the position and management’s acuity for further growth

All performance numbers sourced from Morningstar Direct.