This week’s highlights:
- Bank of Canada Signals Inflation-Fighting Rate Hikes Could Be in the Cards
- Upgrades and Downgrades On Canada’s Largest Funds and ETFs
- The Best Canadian Bond ETFs to Buy
- Tech Sits Out the US IPO Rush As Biotech and Healthcare Stocks Flock to Go Public
- Haven or High Risk? Decoding Bitcoin’s Unstable Market Role
Investors had their eyes on central banks this week as the Bank of Canada held its policy rate steady for a fourth straight meeting, extending its pause while signaling a willingness to hike if energy inflation spreads to the wider economy. South of the border, the US Federal Reserve also left policy unchanged at what marked Jerome Powell’s final meeting as chair. In an unusual move, Powell stated plans to stay on the Board of Governors after his term ends.
Before we get to the rest of the week’s markets coverage, a bit of fund-related news: Morningstar updated its Medalist Rating methodology in April, simplifying how funds are assessed. The revised framework focuses on relevant peer-to-peer comparisons rather than a single category benchmark. Read more for the upgrades and downgrades on Canada’s largest funds and ETFs.
Among bond funds, Tom Lauricella screened the Canadian exchange-traded funds universe to find the fixed-income strategies that stood out on both cost and quality according to the new methodology.
Turning from bonds to bitcoin: the largest cryptocurrency appears to be back in favor as investors rotate out of stocks and gold since the outbreak of the Iran war. Still, as a nontraditional asset, bitcoin struggles with a persistent classification crisis. Valerio Baselli tracks bitcoin’s correlation with conventional assets to demystify its identity and its utility as a portfolio diversifier.
The first-quarter earnings parade continued this week. In Canada, oil and gas major ARC Resources ARX reported solid revenue because of higher oil prices and its US exposure. Industrial giant Canadian National Railway CNR reported top-line growth boosted by higher volume. In the US, large-cap tech names hogged the headlines. Blue-chip AI titans, including Alphabet GOOG, Microsoft MSFT, Amazon.com AMZN, and Meta META, reported on Wednesday. The four tech giants showed robust profit and revenue for the quarter, but Meta’s stock was punished owing to weaker user growth and guidance for an increase in capital expenditure.
In other big-tech news, investors awaiting the initial public offering of OpenAI might have to hold their breath. After missing multiple revenue targets, it’s likely that the AI giant won’t IPO this year after all. PitchBook’s Harrison Rolfes has the full take. Plus, whichever AI company IPOs first will define what “good” looks like, Rolfes says.
The IPO space is heating up, but it’s not being driven by the AI frenzy. Instead, biotech and healthcare stocks are flocking to go public. The April IPO boom has been led by Kailera’s record USD 625 million debut, and tech startups are in wait-and-see mode ahead of SpaceX’s launch.
