Strong jobs /Longest expansion /Sexy headlines
Another good week for indices globally - will this hold - seasonally a good time for equities as we move through second quarter earnings season. Positives: US continues to have strong jobs reports. Canada jobs market pauses after monster first half of year. China continues to stress that the US must remove all tariffs placed on Chinese good as a condition for reaching a trade deal- sounds like they are getting closer to a deal. Strong jobs could lead to leaving interest rate steady. Gold heads for the longest stretch in eight years - helps Canada- just look at the Canadian dollars latest move. Wage gains rising in Canada and the US - in Canada wage gains accelerate it to the fastest in more than a year with it or the annual pay rising 3.8% in June, 2.8% in May – would you have no reason to seriously consider matching Fed rate cuts anytime soon. Current economic expansion is the longest in US history - 10 years – has happened in spite of tax hikes more regulation and aging baby boomer demographic headwinds – it’s been slow – a plow horse economy. The key to growth in the past 10 years is entrepreneurs overcoming political obstacles to keep the US and Canada economy growing - this does not make for a sexy headlines of financial media and they do not give it much heed. Key in the past few years is the direction of policy has kept has finally shifted pro-growth with deep cut in corporate tax rates , full expensing for plant & equipment and deregulation - and the US economy responded with growth accelerating in 2017 and 2018 and a track for another year of growth near 3% (Brian Westbury)
Negatives: Strong jobs report and the negative effects on interest rate cuts. Trade talks - will this now become an election issue and keep dragging on. Seasonally we are entering end of the summer equity rally where equity corrections tend to start. One thing we can count on is that the next 12 months we will see stories of impending doom – fears over foreclosures - defaults on muni bonds - commercial real estate - banking crisis - China slowdowns (multiple times) - maybe even Greece leaving the euro again - fiscal Cliff - government shutdowns - Brexit - hyperinflation - quantitative easing - recession talk from quantitative tightening - all seem familiar.
Investment Wisdom: "Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas." - Paul Samuelson
PORTFOLIO MANAGEMENT–Week’s Highlights
Stocks of the Day: T, UNH, DOL, ATZ
New Issues: CXB
MacKay Weekly Investment Report Contents:
Page 1 - How I see It
Pages 2 & 3 - Notes and Quotes
Page 4 - CDN Mkts
Page 5 – Int’l Mkts
Page 6- Funds & ETFs
Page 7-9 – Favourite Charts
Page 10 – MacKay Group Portfolio Management
Page 11 – Comprehensive Wealth Management
Page 12 – MacKay Group News & Events