A return to market volatility

Jun 12, 2020 | Elinesky Schuett Private Wealth Management


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We’ve seen a return to market volatility this week. Read our synopsis of the situation and implications going forward in this latest blog post. We've also included details on our new WM Online home page and the latest 10-Minute Take podcast links.

Blurry image of a line graph showing volatility.

After weeks of improving sentiment, we’ve seen a return to market volatility this week. We provide a synopsis of the situation below and implications going forward. In addition to this commentary, we’ve also included a tour of the new WM Online home page, as well as your reminder about the ‘e’ for a tree program currently under way. Your links to the latest 10-Minute Take podcasts, a new MacroMemo video featuring economist Eric Lascelles, and our Community Corner are also below.


This week was marked by a return of volatility driven by renewed concern over the global pandemic. It comes after weeks of improving sentiment and growing hope that the worst of the health crisis may have passed and confirmation that the economic recovery had begun.

Coronavirus update

First, the good news. The provinces of Quebec and Ontario continue to see average new daily cases that are trending in the right direction. As a result, the situation in Canada is improving and has led to an expansion of reopening plans. The same can be said for much of Europe where mobility trends have been rising as lockdown restrictions have eased and there have been limited signs of any acceleration in cases. The exception to this appears to be Sweden and the Balkan region, where there have been spikes in new cases in Serbia, Albania, Bosnia and Herzegovina, and Macedonia.

Elsewhere, the news has not been as encouraging. Central and South America remain the epicenter of the crisis. But, there are concerning trends in other regions too. More specifically in Southeast Asia and the Middle East where countries such as India, Iran, and Pakistan have seen meaningful increases once again this week. Meanwhile, in Russia, case trends have not accelerated but remain elevated.

Investors appear to be most concerned, and confused, about the pandemic in the U.S. The question and debate centers around whether a resurgence of the virus is occurring. At a national level, this does not appear to be the case. But regionally, the story is less clear. California, Texas, Arizona, Georgia, Florida, and North and South Carolina are some states that have witnessed clear increases in new case volumes over the past week, with some also showing increases in hospitalization rates. Furthermore, the risk of escalation in other states remains very real given the mass gatherings and protests that have created more opportunities for the virus to spread. Investors will undoubtedly be focused on this over the next week.

The right balance

The reemergence of volatility has reminded us that the path of the economic recovery will be uneven, difficult to forecast, and may remain below its full potential for some time to come. Jerome Powell, Chairman of the U.S. Federal Reserve said as much this week when he indicated that the pace of recovery remains “extraordinarily uncertain” and depends heavily on the ability to successfully contain the virus. Herein lies the next challenge for government officials. More specifically, what approach can foster a functioning economy with effective virus control? The answer is not likely a draconian lockdown as was the case for most of the world over the past few months. Instead, it may involve tactics that are regionally focused, allowing businesses to remain open, mandating physical distancing and protective measures, and identifying and tracing emerging risks and outbreaks. Surely, this is easier said than done.

Investors face the difficult task of staying disciplined in their decision making, focusing on their long-term objectives, and not getting influenced by the short-term swings in sentiment and prices. This challenge has been particularly relevant in recent months and holds true today. While we watch the week to week developments closely, and are constantly monitoring our portfolios for opportunities and emerging risks, we remain committed to our long-term approach that is focused on financial planning, asset allocation, rebalancing, and regular reviews of all positions.

Elinesky Schuett Speaker Series

Thank you to everyone who joined us for our first online event, 2020 Vision: Economic Update with Brad Willock. We are planning additional events over next the few months, and will share the details with you in our regular emails.

Have an idea for a upcoming event? Please reach out to us if there is a topic that you would like to see included in one of our events. You can email us at elineskyschuett@rbc.com or call 519-822-2024 – We’d love to hear your suggestions!

MacroMemo with Eric Lascelles: COVID-19 heats up again

RBC GAM Chief Economist Eric Lascelles reviews economic developments and sees cause for hope and also for concern. Will reopening the economy give COVID-19 scope to make a return? This is a risk Lascelles is watching carefully. On the other hand, signs of economic recovery suggest that green shoots may have room to strengthen and grow.


Watch time: 15 minutes 25 seconds

10-Minute Take

There are three new 10-Minute Take podcasts available on our website.

How renewed COVID fears rattled stock markets

Global stock markets fell after the U.S. Federal Reserve issued grim economic projections for the rest of 2020 and beyond. Budding investor optimism was quickly replaced with the sobering reality of a weak economy and a jump in COVID cases in some U.S. states. Will we see the Fed intervene again? And what could the stock market rout mean for other asset classes? George Davis, Chief Technical Strategist in Foreign Exchange Trading at RBC Capital Markets, shares his take on what’s behind the latest market movements.

The geopolitics of OPEC+ oil cuts

The global group of oil producing countries, known as OPEC+, left its key weekend meeting fractured. While OPEC+ agreed to extend production cuts through to July, its de facto leader Saudi Arabia said it would not. Neither would fellow Gulf states, and Mexico. Add to this an improving (but fragile) demand picture and it could explain why oil prices have been whipsawing since. How will this play out for the oil majors? And where was President Trump this time around? Helima Croft, RBC Capital Markets’ Global Head of Commodity Strategy, shares her take on the latest OPEC+ deal.

Can pro sports stage an epic comeback?

As the PGA Tour starts up again this week, noticeable changes will include tightened safety measures and the absence of on-site fans – par for the course during a pandemic. Some leagues, like Germany’s Bundesliga, have experimented with canned cheers and cut-outs in the stands. But can live sports succeed without live fans? And what does that mean for branding and revenue? Mary DePaoli, RBC EVP and Chief Marketing Officer, shares how the business of sports is adapting to crisis.

You can listen to these 10-Minute Take podcasts online now: The 10-Minute Take.

A tour of WM Online

As you have seen, our new WM Online platform is now live. We thought we’d take this opportunity to provide you with a tour of the home page – There is also a Welcome Tour available online through your WM Online page. Please contact us if you have any questions or need our assistance in navigating the new page.

  • Find what you are looking for with simplified navigation (1)
  • See important information at a glance on the homepage dashboard and drill down to see more details (2)
  • Choose what you want to see using the flexible data columns (3)
  • Access your eDocuments, including account statements and tax slips (4)
  • Quickly update your Profile information or submit a request to change the address or phone numbers you have on file with us (5)
  • Choose your email notification and document delivery preferences (6)
  • Give Nicknames to your accounts to make them easily identifiable (7)
  • See at-a-glance information about the balances in your Accounts or Account Groups (8)
  • View detailed quotes by entering a security symbol or description (9)
  • Take interactive online tours of your Homepage, Holdings and Settings by selecting the “Help” button (10)

Please note that when you access your accounts online through the RBC application, your page will look the same for the time being. You will see a change in your mobile experience when the RBC application is updated in the next few weeks.

 

Did you know that you can get your statements online?
Right now, when you switch to paperless “eDocuments” via RBC Wealth Management Online we will plant a tree in your honour through our partnership with Tree Canada.

 

Travel without leaving home

Self-isolation isn't easy. Fortunately exploring the world can be done from the security of home. These virtual experiences may lift you up, expand your mind and feed your soul during this challenging time. From historic sites to Canadian museums, you can use this link to immerse yourself in places beyond your front door: Free Cultural Experiences to Explore From Your Sofa.

 

Community Corner

Each week, we like to end our posts with a few good news stories from in and around the community. We hope that they brighten your day!

As always, we are available to connect with you personally. Please don’t hesitate to contact us at 519-822-2024 or elineskyschuett@rbc.com.