North American equity markets saw mixed results last week, which were based on a variety of factors.

Of interest to seemingly 99.9% of Canadian investors was the ratings downgrade of the major Canadian banks by Moody’s. Private sector debt has risen to nearly two times gross domestic product, and Moody’s downgraded the banks’ long-term and deposits by one ratings level. One of the contributing factors is the continued rise in house prices, causing increased mortgage borrowing, as well as credit card debt increases. The banks (Royal, Scotia, Montreal, TD, CIBC and National) who received the downgrade had their stocks drop 2-3% last week.

In the U.S., unemployment reached its lowest point since 2007 at 4.4%. Wages are up 2.5% year-over-year, which is providing the U.S. consumer with increased purchasing power. 

The results of the French presidential election, with a moderate candidate winning, have increased optimism across Europe that the inter-country cooperation will continue.

Also, analysts have predicted that Q2 corporate earnings will be a continuation of the strong Q1, reaching levels not seen for over 6 years which should bode well for investors.

I hope you are enjoying the May weather (I know I will once our son’s spring hockey is done). It’s great to see the change of seasons and the city starting to turn green.

All the best,



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