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Making sense of the markets this week: October 4, 2021

October 1, 2021 Dale Roberts
Making sense of the markets this week: October 4, 2021

Oil and gas stocks are back on an incredible run in September 2021. 

Source: S&P Global 

Canadian energy stocks are up 17% in September, using the iShares capped energy index as a benchmark. 

Year-to-date, iShares XEG is up about 62%. Nuttall kindly reminded me his Ninepoint energy fund is up 141%, to Wednesday, Sept. 29, 2021. 

And what’s wrong with the markets this week? 

Certainly, the energy story is weighing on stocks this week, but the greater perceived threat is bonds. The benchmark 10-year U.S. Treasury yield rose again on Tuesday. The move began the week ending Sept. 24, and it is now at its highest levels since June 2021. 

Of course, bond prices move in the opposite direction to yields. You’ve likely seen your bond funds fall in price and value, and bonds will also put pressure on a balanced portfolio. 

From Yahoo! Finance

“‘The prospect of higher energy prices, fuelling inflation, and rises in bond yields that appear to be pre-empting tighter monetary policy by central banks, have prompted widespread selling across global stock markets,’ Chris Beauchamp, chief market analyst at online trading platform IG, said in an email on Tuesday.”

And it is those growth darlings that can be more in the crosshairs of an increasing rate environment. Beauchamp continued:

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