The reopening of the economy

Jul 09, 2021 | Elinesky Schuett Private Wealth Management


Store front showing an open sign

In our blog post this week, we reflect on the current state of the economy and look towards the latter half of 2021 as many parts of the world begin to reopen.

Along with this commentary, you’ll also find a link below to a recent article written by Kelly Bogdanova, A transition period is coming for U.S. equities, and a link to the latest #MacroMemo with Eric Lascelles, Rising infections, reviving economic activity, with labour shortages and work-from-home.

In addition to our economic content, we’re pleased to share latest issue of RBC Wealth Management’s Perspectives magazine - this edition focuses on well-being and wealth planning, now and for the future.

Also included this week’s post is an article for business owners, How to Protect Your Customers’ Data from Hackers. And in case you missed it in our last post, you’ll find your link to the event replay Understanding the importance of Advance Care Planning.

As always, we end our weekly blog post with a few good news stories from in and around our community.

Economic commentary

Market developments may not be top of mind these days. After all, the economy is finally reopening and summer is now officially upon us. We take the opportunity below to reflect on the current backdrop and market narrative which we expect to persist into the second half of 2021. There are risks that need to be acknowledged, but the outlook remains constructive.

The U.S. economic backdrop should remain relatively strong through the remainder of the year, driven in particular by the services sector. While the world’s largest economy may see its economic momentum fade at the margin through the second half, it should remain above average. That is supportive for global equities, which have historically done well in the absence of a U.S. recession.

There is some concern that monetary policy may be on the verge of change. Historically, rising interest rates eventually restricted the ability of some consumers, households, and businesses to access credit. Those tighter financial conditions have typically resulted in slower economic growth and, in some cases, outright recessions. So it is understandable that investors are worried, but the withdrawal of monetary stimulus should be very gradual in nature and take years to develop. We believe the current environment of favourable financial conditions should remain in place for some time to come.

The growth outlook outside the U.S. has more recently started to improve with a reopening of economies in places like Canada and Europe. This should support the view that global earnings will continue to grow at a double-digit pace, helping meet the lofty market expectations that exist.

The predominant risk in most of the world remains the same as it has been for some time: COVID-19. The delta variant is rapidly becoming the dominant strain in many parts of the world. Infection trends are currently most problematic on the other side of the world. Countries such as Indonesia, Malaysia, Thailand, Russia, and South Africa are dealing with worrying trends. Even Australia has implemented new restrictions. Israel, which has among the highest vaccination rates, has started to see rising infections, although the severity appears to be low as a result of its vaccine rollout. It is a reminder that the pandemic remains a key risk to the future growth trajectory.

The potential for sustained inflationary pressure has also emerged as a concern this year. This pressure may remain a source of risk until more evidence emerges that clarifies whether pricing pressures are simply being driven by a combination of supply chain bottlenecks and the reopening phenomenon, or factors that are more durable in nature. It will take some time to gain that level of clarity.

Many developed global equity markets have done quite well year-to-date and are sitting near all-time highs. While valuations are above average for many, the backdrop of robust growth, double-digit earnings gains, and favourable financial conditions remains supportive for stock prices. We are also encouraged by the depth of the global market’s gains this year as it has not been tied to just one or two groups of stocks, but rather a relatively wide range of sectors and areas - a sign of a reasonably healthy market advance.

As always, we will monitor developments closely and provide thoughts on anything noteworthy.

A transition period is coming for U.S. equities

Business people working at a boardroom table. Text: Global Insight WeeklyThe U.S. equity market—and most markets, for that matter—finished the first half of the year on a positive note, adding to outsized year-to-date gains. The S&P 500 rose 2.2 percent in June, ending the month at an all-time high, and has rallied 15 percent so far in 2021.


We think major equity markets have further room to run due to the strong economic and corporate earnings momentum generated by the partial taming of the COVID-19 virus and related economic reopenings, and the already implemented supersized fiscal and monetary stimulus


Read more online: A transition period is coming for U.S. equities


Rising infections, reviving economic activity, with labour shortages and work-from-home

In this video, Eric Lascelles, RBC Global Asset Management’s Chief Economist, reviews the latest virus and economic developments. While global infections continue to rise, he observes strong economic activity -- especially in leisure and hospitality sectors. He also provides perspective on recent labour shortages amidst new job and business creation in the United States.

Watch the video online: Rising infections, reviving economic activity, with labour shortages and work-from-home

Blue background with outline of globe. Text: RBC Global Asset Management. Rising infections, reviving economic activity, with labour shortages and work-from-home

Watch time: 14 minutes, 42 seconds


Attention business owners: How to Protect Your Customers’ Data from Hackers

No matter the size of your business, if you store your customers’ information on servers, in the cloud, or even on a spreadsheet, protecting that information is key to your business. How you keep that data safe affects your business and your reputation.

Read the full article online: How to Protect Your Customers’ Data from Hackers


RBC Wealth Management - Perspectives magazine

Volume 9, Issue 1

RBC Wealth Management’s Perspectives magazine is online now! This edition focuses on well-being and wealth planning, now and for the future. The various articles explore how the right planning strategies can offer peace of mind when it comes to what matters most, and help ensure you achieve your long-term goals.

In this issue:

  • A discussion about estate planning in today’s times and four key elements to give thought to.
  • Nine important areas of focus in organizing your financial picture.
  • Reflecting on your charitable values and planning strategies that may help you make a more meaningful impact over time.
  • Practical financial literacy tips for teaching kids of different ages about money management.
  • A Q&A with three RBC Olympians who offer their insights on health and wellness.

Perspectives magazine cover: multi generational family

Please click below to view this edition:

Perspectives, Volume 9, Issue 1


Event replay: Understanding the importance of Advance Care Planning

Family walking along a grass path near the beachIf you were unable to attend our recent online event, Understanding the Importance of Advance Care Planning, please set aside some time to watch the event replay online. In this video, Dale Gellatly from Hospice Wellington shares a wealth of information on what Advance Care Planning is and why it should matter to you.

Watch the replay online: Understanding the importance of Advance Care Planning


Community Corner

Each week, we like to end our blogs 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