Monthly Newsletter: Portfolio Advisor - July 2022

July 12, 2022 | Thomas de Mello, CIM


RBC Global Insight Monthly - July 2022

2022 Midyear Outlook

I am pleased to share the latest investment strategy report from RBC Wealth Management—Global Insight, which provides our latest thoughts on asset classes, the economy, and timely issues that impact investment strategy. This month’s topics include:

Prospects for the equity market in the shadow of inflation –We look for catalysts that could spark a new move higher for markets, or signal the approach of a recession

More inflation to bring more rate hikes, but also rate cuts? – While rising inflation has led central banks to step on the rate hike accelerator, a shift may be on the horizon as inflation fears could soon give way to growth concerns, potentially driving central banks to tap the brakes.

U.S. recession scorecard update - Our U.S. recession scorecard, designed to look forward six to 12 months, continued to give the economy an expansionary green light at the time of publication, however, this has since been updated as several indicators have moved from expansionary status to neutral (see updated scorecard in article further below).

Taking charge: The EV charging ecosystem opportunity - Building out the EV charging ecosystem is key to driving widespread adoption of electric cars. We explore the growth potential of this nascent market.

Regional commentary - Our regional analysts present their views of equity and fixed income markets, currencies, and commodities, as well as how to position portfolios

Read more>

Audio Summary >

Advice Event: Responsible Investing

Invest with a Greater Purpose - Socially Responsible Investing & ESG

Thursday - August 18th, 2022 @ 12pm

How will you align your investments with your personal beliefs and values? More and more people are turning to responsible investing—a process that applies environmental, social and governance (ESG) data to your investment portfolio.

Please join us for this special advice event, where we will be discussing the features, benefits and various options available for responsible investing.

In partnership with RBC Global Asset Management

Hosted via Cisco Webex
Register Here>

Economy - Updated Recession Indictors

Recession Scorecard Update: RBC Wealth Management’s U.S. recession scorecard, which tracks seven important leading indicators of recession, has recorded some deterioration in just the past week. The changes, along with descriptions of the status of each indicator, are noted in the publication.

Proof Point: Canada’s economy is headed for a recession: RBC Economics also just published a report stating that they except a recession in 2023, however, they believe it will be moderate and short-lived by historical standards—and can be reversed once inflation settles enough for central banks to lower rates.

Recession and the Impact on your Investments: Regardless of whether a recession is already upon us, right around the corner, or could materialize within the next year or two, the bigger question for investors is: To what degree has the U.S. equity market already factored in a recession? With the S&P 500 down almost 20 percent from its peak and some widely owned stocks within the index down much more, while the NASDAQ Composite and the smallcap Russell 2000 are both down almost 30 percent, we think much of the weakness has been priced in—as long as the Fed doesn’t slam on the brakes too hard by raising interest rates much higher than is warranted, and as long as inflation doesn’t linger at an elevated level for a long time.

Financial Literacy

Age-specific guide for younger generations

When it comes to younger generations in your family, you want nothing but the best. Equipping them with the skills they need to be successful adults is often an ongoing focus, and a solid financial education is a key part of every child’s successful future.

Presented by Civic Action Leadership Foundation and RBC Future Launch, this 5 part video series provides brief tutorials to help you learn how to track your money and understand the basics of financial literacy (suitable for ages 10 – 16).

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Real Estate: Canada's Housing Market Keeps on Cooling

Another month gave way to another cooling in Canadian housing markets. To a varying degree, Toronto, Vancouver, Montreal, Ottawa and Calgary all witnessed further declines in home sales in June as markets continue to reverse their pandemic surge following rising borrowing costs with the Bank of Canada pushing interest rates higher.

The slowdown in June was particularly acute over areas where markets were strongest during the pandemic (and prices the highest) - Home sales in Toronto and Vancouver declined 41% and 35%, respectively year over year in June.
Read more>

This information is not investment advice and should be used only in conjunction with a discussion with your RBC Dominion Securities Inc. Investment Advisor. This will ensure that your own circumstances have been considered properly and that action is taken on the latest available information. The information contained herein has been obtained from sources believed to be reliable at the time obtained but neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers can guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed as an offer to sell or the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers is to be under any responsibility or liability whatsoever in respect thereof. The inventories of RBC Dominion Securities Inc. may from time to time include securities mentioned herein. RBC Dominion Securities Inc.* and Royal Bank of Canada are separate corporate entities which are affiliated. *Member-Canadian Investor Protection Fund. RBC Dominion Securities Inc. is a member company of RBC Wealth Management, a business segment of Royal Bank of Canada. ®Registered trademarks of Royal Bank of Canada. Used under licence. © 2022 RBC Dominion Securities Inc. All rights reserved.