February Markets

The U.S. S&P 500 index is up significantly on a year-to-date basis, a continuation of a trend that surprisingly began on October 26th, 2023, (see chart below). As we have seen quite often in the past, market trends can turn on a dime without notice and continue with extended upward trends.  

Once again we see how dangerous market timing is and missing just a few days during this reversing trend can seriously impair long-term investment returns. As a continuation of that trend, February marked new all-time market highs for the U.S. S&P 500 and the tech-laden U.S. Nasdaq market Index. While Canada didn’t quite make the “all-time high” list last month we are modestly higher. Canada’s heavier index weighting of energy and financials held us back from the tech rally.

The catalyst for this strong tech-centric rally was Nvidia, the market's A.I. computer chip darling that turned in a stellar, better-than-expected $18.4 billion quarter and strong forward guidance indicating continued sequential growth.  

We now have two primary points of optimism going forward:

• This A.I. trend is likely to have legs, some say for years to come, a whole new sector.

• Although markets have been narrowly led by the Magnificent 7*, there is value in the rest of the market as the share prices of hundreds of other high-quality names gain share prices as markets broaden out.