August 2014 was an amazing month. The S&P 500 had its inaugural close above 2000, which also made it the best August return since its 6.1% gain in August 2000. This all happens 16.5 years after hitting the 1000 mark, and at a time when 10-year US treasury yields closed the month at 2.34%, below 'pre-Bernanke tapering' levels, and when German 10-year Bunds closed the month at 0.89%. In Canada, the month-long flight to bank shares ended with messy and less than stellar fiscal Q3 numbers despite record headline EPS...

Lulled to sleep by consecutive record closing highs at the beginning of July, investors were abruptly awakened by the end of month haircut to risky assets. While the S&P 500 suffered its first monthly decline since January, Canada’s TSX eked out a 1.42% total return, thanks to the 4.5% advance in bank stocks which contributed a 1.46% total return to the index. Given better than expected fiscal Q3 results and growing discomfort with dividend growth at the telecom stocks and the valuations of utility and mid-stream companies, the reallocation of investor dollars to Canada’s most heavily weighted sector propelled our market to its positive performance in July. In contrast, high yield bonds sold off hard, as did the small cap bellwether Russell 2000 index, down 6.1%...

While May 2014 saw stocks climb to record highs, equity markets went into high gear during June 2014 with beta sectors, including internet and biotech stocks, leading the charge...

May 2014 was truly one for the record books. U.S. large cap markets posted multiple new intra-day and closing highs (6 for the S&P 500 after 45 during 2013) while yields on 10-year U.S. T-bonds fell below their 2.5% post-Bernanke ‘taper tantrum’ of May 22, 2013. On the surface, it seems unimaginable to enter the 6th year of an economic recovery and have stocks reach record highs while yields hit 52-week lows, serving to flatten the yield curve…