Monthly Newsletter: Portfolio Advisor - September 2022

September 12, 2022 | Thomas de Mello, CIM


Global Insight Monthly - August 2022

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:

The election effect

As we head into the heart of yet another hotly contested U.S. election season, it makes sense for investors to wonder if the outcome of November’s midterms will prove to be a pivot point for the stock market. We examine historical equity market performance surrounding such elections, and what that might be—or might not be—signaling for this year and next.

U.S. recession scorecard update

Coming into focus – Three of our seven leading indicators of a U.S. recession have reached levels that signal an economic downturn is likely, while the other four are at various stages with most moving from strong to weaker. We think the recessionary path forward is becoming clearer.

Global equity: Caution called for

- Equity markets are facing challenging crosscurrents. An upside capped by a continuation of central bank rate hikes set against the potential for further downside that could arrive in response to a probable recession in 2023 presents a risk/reward profile that argues for caution.

Global fixed income: Flying blind

- A divergence in global inflationary pressures between various regions will likely have differing impacts on the policy paths of major global central banks going forward

Read more>

The economy is slowing…now what?

Presented by: RBC Wealth Management Canada’s Portfolio Advisory Group

Tuesday, September 20th: 10:00am – 11:00am

2022 has been a challenging year for investors, with major global markets entering bear market territory or suffering sharp corrections over the last several months. Key underpinnings to the market’s performance – from monetary and fiscal policy, to inflation and the strength and sustainability of corporate profits – have all shifted dramatically recently and led many investors to question what’s next for the economy and what the impact may be on their portfolios. Topics of this presentation will include:

• Economic outlook

• Market and sector thematics

• Parting thoughts on market valuations, asset allocation and performance of stocks over the long-term

Hosted via Cisco Webex
Register Here>

Video replay: Responsible Investing

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.

Joined by Catherine Philogene - VP of Product Management at RBC Global Asset Management, we discussed the features, benefits, and various options available for responsible investing.

Watch Here > (30mins)

Interest Rates: BoC opts for another oversized hike and firm tightening bias

The BoC continued on its steepest rate-hiking path in decades, following up July’s 100 bp increase with a slightly smaller (but still oversized) 75 bp hike today. The move was in line with expectations and lifts the overnight rate to 3.25%, slightly above the 2-3% range the BoC considers neutral.

Read More>

Real Estate: Higher interest rates weigh down on Canada’s housing markets

The cooling trends that emerged this spring are still firmly in place across Canada’s housing markets. Early reports from local real estate boards for the most part showed both resale activity and prices continuing to soften in August.

Rising interest rates are pushing many buyers to the sidelines and reducing the purchasing budget of others. Our expectations for the Bank of Canada to hike its policy rate to 3.5% by the fall will keep chilling markets in the months ahead. We see the downturn intensifying and spreading as buyers take a wait-and-see approach while ascertaining the impact of higher lending rates. Canada’s least affordable markets Vancouver and Toronto, and their surrounding regions, are most at risk in light of their excessively stretched affordability and outsized price gains during the pandemic.

Read More>

Financial Literacy: Book Offer

Essential Financial Concepts for Youth

As an extension of our ongoing commitment to financial literacy, we are thrilled to offer you a copy of "A Rich Future: Essential Financial Concepts for Youth", a book, to serve as an ongoing educational resource to help kids and teenagers build practical knowledge and confidence with financial topics.

The book’s author, Noah Booth, is a Canadian high-school student who, from the age of 10, took an interest in finances. His interest led him to realize there weren’t many resources out there for teenagers that zeroed in on a personal finance. Recognizing the benefits of building financial skills and awareness from an early age, Noah has spent years learning, researching and connecting with experts, the culmination of which is his newly released book.

This is an exclusive, no-cost offer. Simply email us directly and let us know where to mail your copy and we will have it sent out via Canada Post.

Request your free copy today

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.