A few topics our newsletter touches on this month:

• Our Thoughts: Temperature (& Equities) Rising
• Interesting Reading/Listening: Disruptors, Canadian dollar, housing market, Beyond Van Gogh exhibit

Our Thoughts: Temperature (& Equities) Rising

We’re in the middle of the dog days of summer. Global equity markets remain in the midst of a very strong year, with Canadian, U.S., and European equities sitting near all-time highs.

Monetary Policy: The U.S. Federal Reserve garnered some attention over the past week, as it always does. Its updated economic outlook was largely in-line with what investors were anticipating.  And the Fed, as it’s often called, is not likely to alter one of its major monetary tools – its asset purchase program - until the end of the year. The other noteworthy development in recent weeks has been the earnings season, which has been good enough to meet elevated expectations.

Equities: Over the last 1.5 years, the tech sector has become even more important to global equity markets given its sheer size and resilience in the face of the COVID-19 pandemic.  Many large technology companies reported second quarter results over the past 2 weeks that were solid overall, with the odd exception here and there. It reflects the favourable demand environment for the range of products and services they offer. Expectations were high, and so the stocks themselves did not necessarily respond as positively as some may have wanted, serving to remind investors that stocks are effective at reflecting expectations, and it’s the future that matters more than the past.

By the numbers (July): The TSX rose 0.8% while the S&P 500 rose 3.0% (2.4% in US dollars). Europe, Australia & Far East index (EAFE) was up 1.3%. The Canadian bond universe was up 1%.

What else are we are watching:

• The U.S. economic backdrop should remain relatively strong through the course of the rest of the year, driven in particular by the services sector. This is supportive for global equities, which have historically done well in the absence of a U.S. recession. The consensus view is that global earnings will continue to grow at a double digit pace, helping meet the lofty market expectations that exist.

Interesting Listening/Reading

• Disruptors – a great, dynamic ~30 min RBC podcast hosted by SVP John Stackhouse about re-imagining Canada’s economy in a time of unprecedented change. Here are this month’s episodes (available on Apple Podcasts, Google Podcasts, Spotify or Simplecast)
  • Disruptors Revisited: How 5G Will Transform the Canadian Economy
  • Leaders of Tomorrow: How Indigenous Youth Can Seize the Digital Day

• • Land of Unicorns: Canada’s New Bounty of Billion-Dollar Tech Companies
• To check out our Global Insight Monthly for July, find the link on our website here.
• From RBC Economics:
  • Has the Canadian dollar already reached its peak for the year?
  • Canada’s housing market slowed down but still strong

For fun: Mark & Margy (see picture) went to check out the art exhibit “Beyond Van Gogh – The Immersive Experience” at the Aberdeen Pavillion at Lansdowne. The exhibit continues to September 16^th, if you are interested you can buy tickets here.

Hope you are having a great summer – please do not hesitate to reach out to any member of our team to discuss your portfolio or financial plan.

Mark, Peter, Sarah, Corinne & Nathalie

Gallivan Wealth Management Team