Chart of the Week (COW)
Let’s look at a chart and then comment:
The chart above looks at daily Covid cases in the U.S. less daily Covid cases in Canada. We adjust the Canadian population, which is about 1/10th that of the U.S. to get a more apples to apples comparison. As you can see, Canadian adjusted cases briefly exceeded U.S. cases in the Spring, but we are once again near a peak in terms of the number of daily cases south of the border vs. north of the border.
Covid 19 Update
The news is actually better than the headlines. Globally, case counts are still exceeding 500k/day with most regions still in the midst of a Delta fueled surge. However, while the vaccines are struggling to prevent breakthrough infections because of the virility of Delta, they continue to do a very good job of preventing severe or fatal cases in those that are vaccinated.
Israel has become the poster child of sorts for this with daily new cases exceeding all prior surges:
However, unlike prior surges, severe cases in Israel as well as fatalities have not surged to nearly the same degree. In fact, Israel currently reports ~85k active cases of Covid with ~685 serious cases. This amounts to ~0.7% of cases that require hospitalization. To put this in perspective, in the winter surge, the fatality rate (not the hospitalization rate), exceeded 1% in Israel. That surge, of course, occurred at a time when few in Israel had been vaccinated.
Market Update
The “September Swoon” continued this week; although, just as with prior weeks, the swoon has been relatively mild. The market continues to struggle with a combination of factors including: 1) the Delta fueled slowdown in the global economy as re-openings are delayed; 2) the U.S.’s failure to pass infrastructure legislation; 3) election uncertainty in Canada with Monday’s election very much a jump ball for who will lead the country; and 4) fears that a weak minority government in Canada will lead to policy stagnation.
Economic Update
With a son entering grade 12, who is not the greatest of students when it comes to traditional subjects, the following article from RBC Economics was very much of interest: https://thoughtleadership.rbc.com/powering-up-preparing-canadas-skilled-trades-for-a-post-pandemic-economy/?_ga=2.161001343.318044389.1631798386-1168347907.1603291736
Canada faces a serious “skills gap” over the next decade, especially when it comes to traditional manufacturing and skilled labour positions. The article from RBC Economics does a really good job of fleshing out some of these issues. We fear that the government lacks the “spark” to target investments toward these areas of the economy.