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A drop in Bitcoin, rising inflation pressures, and concerns about central banks’ reaction put the major North American stock indexes through a week of unsettled, directionless trading. In, Canada, consumer prices rose 0.5% in April from the previous month, for an annual rate of 3.4%. In the U.S. the all-items consumer price index rose to 4.2% in April. However, both the Bank of Canada and the U.S. Federal Reserve have indicated that they believe these spikes are transitory, more a result of the base effect of a much lower rate a year ago during the initial pandemic lockdowns and consequent mini-recession. Still, investors remain worried that central banks will rapidly change their minds and curtail their program of quantitative easing and low policy rates in an effort to get ahead of the inflationary curve.
The S&P/TSX Composite Index gained 0.8% on the week, even as crude oil fell 2.5%. Gold rose 2.0%. The S&P 500 Composite Index fell 0.5% on the week, while the Nasdaq Composite Index edged up 0.3%.
* Mackenzie winds up corporate class funds. Mackenzie Investments announced on May 20 that it plans to wind up Mackenzie Financial Capital Corp. and its suite of 34 corporate class funds effective July 30. The funds will be merged into their corresponding trust fund equivalent, on a tax-deferred basis. The move will also affect six Mackenzie Canada Life corporate class funds, managed by Mackenzie, which will also be merged into corresponding trust funds managed by Canada Life Investment Management.
In a release, Mackenzie said it “believes this is in the best interest of investors since Capitalcorp is in a taxable position. Changes to tax legislation and evolving market trends have eliminated many of the benefits that were previously available to corporate class funds.”
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