After weeks of deteriorating trends, some incrementally positive signs have emerged. More specifically, there is early evidence that Italy, and other European countries such as Spain and Germany, may finally be experiencing a slowing in the rate of new case growth after nearly three weeks of strict lockdown measures. The situation remains very serious in those countries but it provides some hope to Canada and the U.S., which continue to see their new cases rise meaningfully. Both countries implemented their own series of measures to contain the virus a few weeks after some of their European counterparts. As a result, it may take a few more weeks to gauge whether the rate of new infection can slow in North America. Meanwhile in Asia, we continue to watch for any signs of a second wave of infections.
In addition to the health crisis, governments continue to respond aggressively to the looming economic emergency. More specifically, the actions undertaken by most governments have been sharper, bigger in scale, and more diverse than those undertaken during the great financial crisis over a decade ago. Measures have ranged from wage subsidies, to child benefits, business loans, mortgage support, moratoriums on student loans, and direct payments to consumers, among other initiatives. While it won’t eliminate the hardship that many are likely to face, it has left the impression that policy makers are willing to do whatever it takes in the weeks and months to come to help lessen the blow from an economic shutdown. Meanwhile, central banks have continued to find creative ways to ensure a sound financial system that can offer liquidity and proper functioning of credit markets for those that need to borrow.
A word on Canada
As previously mentioned, the actions undertaken by governments have been significant. Canada has been no exception. To date, it has announced direct support to the economy amounting to $105 billion (nearly 5% of our country’s economic output). Inevitably, whether it is our clients, family, or friends, we are all likely to know people whose job, education, or business has been or will be impacted by the current economic difficulties. The Canadian government has created Canada’s Covid-19 Economic Response Plan, which is a collection of diverse measures undertaken so far to help households, consumers, students, parents, and businesses who are at risk.
Last week, the Government of Canada announced a new relief package to support Canadian businesses that have been impacted by COVID-19. We’ve included details of the new program for business owners in the article Update on the government's economic response to COVID-19.
Economic data has deteriorated sharply of late. Investors should brace for more of the same in the weeks to come. In Canada for instance, the number of people filing for unemployment insurance has surpassed one million individuals. Meanwhile, in the U.S., jobless claims rose to more than six and a half million this past week, a doubling of the level from a week ago. Interestingly, the equity markets have behaved relatively better of late despite the sombre headlines as they had already fallen meaningfully in preceding weeks, reflecting the anticipation of an economic recession.
The important question remains whether the measures that have been taken – and may yet be taken – by governments and central banks are meaningful enough to contain the virus and limit the impact to the global economy to a period of months versus something that extends well into the second half of the year and is deeper in nature.
Eric Lascelles, RBC Global Asset Management’s Chief Economist and one of the guest speakers at our Economic Update seminar last year, shares his insight on the current situation in his latest article: #MacroMemo – March 30 – April 3.
Although we shared a number of links in our last blog post about fraud awareness, we thought that you might be interested in this online article that was published recently by RBC Royal Bank: Six Ways to Protect Yourself from COVID-19 Scams.
Please remember that it’s important to protect not only your family’s health, but also your finances.
While we have all be inundated with the latest COVID-19 news online, on the radio, and in the evening news, we thought we would share a few good news stories happing in and around the community.
- A colourful driveway project brightens up Guelph's west end
- Acts of kindness sprouting up all over Wellington County
- White Heart Campaign latest effort to raise spirits of essential workers
- Neighbourhood Window Walks are popping up everywhere
Also, with children spending time away from school and so many resources being made available, we thought we’d share a few links for parents and grandparents that some of our team members are using with the younger children in their lives:
We are also focusing on Financial Literacy this month on our Facebook page. There will be articles of interest posted for all ages.
As always, we are available to answer any questions that you may have. Please do not hesitate to contact us at 519-822-2024 or email@example.com.