A few topics our newsletter touches on this month:
- Our Thoughts: Election Season
- Interesting Reading/Listening: Disruptors on Mental Health & Resilience, Summer GDP Growth, Green Project Investment and Election Poll Tracking/Vote Compass
Our Thoughts: Election Season
As we enter into the fall season, the top news item is of course the Canadian federal election set for Sept 20th. The Liberal government called the election feeling they had a chance at a majority government, but recent polls suggest Canadians are less than thrilled to be voting during the pandemic and project a close race against the Conservatives. A historic percentage of Canadians are expected to vote by mail in this election – if you want to do so you need to register before Sept 15th, 2021 - you can find the details here. We will include our thoughts on the impact of the election results next month. Historically Canadian elections have little effect on markets; same too with party platforms; the biggest factor in our outlook is the health of the US economy.
Economic Outlook: The general economy continues to learn how to function amidst a pandemic that is nearly 1.5 years old. That’s not to say things are back to normal, particularly for some pockets of the economy. But, consumers, households, and many businesses have figured out how to make do, for the most part. Vaccinations have helped too. And while new cases are rising across many jurisdictions, the impact on hospitalizations and the economies of many countries has become less pronounced with each successive wave of the virus. As a result, markets aren’t as fussed as they once were and that trend may continue barring any meaningful change in transmissibility and morbidity.
On the other hand economic growth in recent months has begun to slow. Undoubtedly, part of this is driven by new waves of the virus, but much of the slowing has to do with a reversion that was inevitable. The slowing explains the recent weakness of late in some pockets of the global markets such as commodities, cyclical sectors, and even currencies like the Canadian dollar.
These issues haven’t deterred global equity markets, with many still sitting near their highs. Our outlook remains constructive given the diminishing impact from the virus, an economy that should continue to grow at a reasonable pace, and a monetary policy backdrop that remains very supportive. Nevertheless, investors may want to temper their expectations with respect to investment returns in the next 12 months given the strong returns so far this year.
By the numbers (August): The TSX rose 1.6% while the S&P 500 rose 4.2% (3% in US dollars). Europe, Australia & Far East index (EAFE) was up 2.7%. The Canadian bond universe was down 0.1%.
Interesting Listening/Reading
- Disruptors – a dynamic ~30 min RBC podcast hosted by SVP John Stackhouse about re-imagining Canada’s economy in a time of unprecedented change. New episodes:
- To check out our Global Insight Monthly for August, find the link on our website here.
- From RBC Economics:
- Election platforms are being released, which of course means the inclusion of policies that could impact your tax bill.
- 338Canada or CBC poll tracker are great resources to follow the horse race in the lead up to Election Day.
- Have someone in your life voting for the first time? Show them CBC’s Vote Compass to get them interested in reading up on party platforms (definitely an imperfect tool but a fun starting point).
Summer fun: The Gallivan Wealth Management team got together for an end of summer meet-up to celebrate Corinne’s 23rd anniversary with DS. Photo collage included.
We hope you are also enjoying the final moments of 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