Good morning,

I trust everyone enjoyed the sun out there this weekend!

Before we dive into some market info and what to look for this week, as always, I thought I’d share some quick thoughts for us to reflect on this week.

Imagine we began each day asking yourself: "How can I change my life today?"

This notion of self-development is predicated on the premise that an awareness of self is the basis for all positive human endeavor and interaction. I

’m the first to admit….the Covid19 times has certainly put a damper on my daily routine. (having a newborn in the mix also kind of shuffled the routine around).

Well, after some reading on the weekend, and some self-reflection……I suggest that we ALL commit to making today the day we start getting things back to normal --- starting with one of my favorite topics, self-awareness and focusing on our own Human Capital and Intellectual Capital assets.

“Our greatness lies not so much in being able to remake the world as being able to remake ourselves” - Gandhi

I pulled together a little list below of some points that can help us start to enhance our routine….

• Choose comfort for your future self over comfort right now.
• Be more responsive.
• Be less reactive.
• Curate your sphere of influence.
• Take action when you want to do something.
• Take action when you don't.
• Read more.
• Scroll less.
• Observe your patterns.
• Practice saying "no."
• Practice diverting your attention.
• Share your ideas consistently and clearly.
• Use what you have.
• Drink one more glass of water.
• Eat one less unhealthy snack.
• Start a journal, write one paragraph.

In the Markets

Last week was marked by an early dose of optimism. More specifically, a promising update on a potential coronavirus vaccine and more progress on the easing of restrictions and reopening of economies. Offsetting this to some degree was the ongoing struggle to slow the spread of the virus globally, particularly in the emerging markets. Unfortunately, the week is ending on a sour note on renewed tension between China and Hong Kong, which may have global ramifications. In the week ahead, the spotlight turns to the Canadian banks who are expected to report results. We provide our thoughts below.

Coronavirus update

At a high level, the trends of the past few weeks have remained in place. Europe continues to broadly improve. As a result, countries in the region are gradually loosening an increasing number of restrictions and reopening more parts of their economies. In Canada, a similar story continues to unfold though new daily cases in Ontario and Quebec simply refuse to meaningfully decelerate. Nevertheless, both have moved forward with their reopening plans. In the U.S., the story remains as mixed as it has been of late, with new daily virus cases that have not changed much. To be clear, in some states, the levels have meaningfully improved but in others, they have risen, essentially offsetting one another. Encouragingly, despite the loosening of restrictions and gradual reopening across Asia, Europe, Canada, and the United States, there have not been signs yet of any acceleration in case counts. The epicenter of the health crisis is now in the emerging markets where new daily case counts are elevated and some countries are seeing an acceleration. Russia and Brazil now have the unfortunate label of being the second and third countries with the highest number of infections globally. It is hard to anticipate a change in this trend, particularly in Brazil where the approach to containment appears disorderly.

Spotlight on the Canadian banks

As most of you know, our exposure to Canadian Banks is minimal as we continue to be concerned with the fundamentals of the Canadian economy. The Canadian banks are set to report second quarter results over the next week. This is a particularly important update. First, the banks tend to be a good gage of the health of our overall economy. The results for the period of February through April, and management commentary on the outlook, will offer clues about the extent and trajectory of economic damage in this country. Secondly, the banks represent a meaningful portion of most Canadian investor portfolios. If the U.S. banks, who reported their own results weeks ago, are any indication, the results are not likely to be very good. But, that may already be expected by the market to some degree. Bank stocks trade at valuations that were last seen during the great financial crisis of more than a decade ago. This signals to us that investors already expect the companies to face higher risks in the form of future loan defaults and customer bankruptcies. While these loan issues may not arise immediately, the banks have to effectively budget for them in advance and it is widely expected they will begin to do so with the release of their results. We are going to be watching Q1 and Q2 closely here as there may be a buying opportunity if banks see further significant declines in prices, which we anticipate.

China

There has been enough to worry about in recent months. We view China’s announcement of new national laws being imposed on Hong Kong as being yet another potential source of stress in the relationship between China and the U.S. It is a risk we will continue to watch closely.

“The most important part of being a leader is maintaining the desire to keep on learning. This means learning about yourself, about your peers, and about the people you serve” Brain Kovel