Bonds are back For a great portion of the last decade, there has not been a substantial income advantage for fixed income investors over equity dividend yields. In the last 18 months, we’ve seen an over 4% yield advantage on US corporate bonds versus their S&P 500 counterpart.

Is Cash King? Many have rightly taken advantage of the highest yields on cash since 2007, particularly for short-term capital calls of unknown timing. Looking back on a history of tightening cycles (raising interest rates), bonds have produced substantially higher returns when hiking is completed – and comparable returns to cash when hiking is ongoing. Why? Cash tends to drop in yield with interest-rate cuts, and bonds tend to be forward looking (you get the positive return of cuts pulled into the price earlier).

Canadian Millennials stretched by debt In an RBC Economics review that will likely not surprise our millennial or gen x readers - Canadian millennials have the smallest cushion against job losses, and substantially less than the same age cohort 20 years ago. As we consider the effects of any labour market surprises, the addition of up to 25% mortgage monthly payment increases next year will only increase this burden.

Are we still working from home? In this chart prepared by the Becker Friedman Institute that examines visits to Central Business Districts (commuting “downtown”), we see a distinct division between large and small cities returning to the office – with large cities normalized at lower levels, and small cities returning to near pre-pandemic levels.

Chinas 40-year boom ends? In a recent piece from the Wall Street journal, the WSJ posits that far from succeeding the US as the world’s largest economy, their current growth trajectory and population demographics means that they may struggle more than anticipated to exit from their status as an emerging market. The International Monetary Fund puts China’s GDP growth at below 4% in the coming years, less than half of its tally for most of the past four decades.

See our full report: Global Insight

Stay tuned for more insights and happy investing!