COVID, Kleenex, and Coal.
With titles like “Mines over Matter” and the “RBC Mining COVID-19 Tracker” our Capital Markets team keeps track of the pandemic’s potential to hinder exports. Nations who find themselves on the wrong end of a sort of “average body temperature to coal exports” ratio – could limit production and supply, pushing prices up. We actually went to school for this stuff. It’s like Moneyball by commodity, and when it works it’s a good hard smacker down the third base line -- otherwise it’s good filler for a Friday email.
If you want more on this, or similar reports on the lumber industry, etc. let me know. So many reportseses!
Overall: Markets are grappling with elevated investor expectations. The first quarter earnings season, nearly complete, has been strong, but was met with a relatively muted response by most stocks, even by many of those that reported better than expected results. Good earnings may not quite be enough in the current climate.
Speaking of which…
Canada’s progress over the past week was a bit disappointing. Our 7-day average rate of new daily infections stands at 7800, which represents an incremental drop from the week ago period. Ontario, Saskatchewan, and British Columbia experienced declines, Quebec had a modest increase, while, Manitoba, Nova Scotia and Alberta rose sharply. Canada’s third wave peaked a few weeks ago, but a more meaningful decline in new infections needs to take hold.
Elsewhere, the U.S. continues to see steady declines, as does Europe, though to varying degrees. India is garnering the most attention given the sheer volume of new daily cases, recently reporting more than 400,000 in a single day. This is actually the part of the pandemic that’s worried me terribly from the get-go. The crowded, hot, poorer nations in this later, more virulent iteration of the sickness. Here is our test as a human family.
“This Economy is Juuuuuuusssst Right.” (Goldylocks). Markets are hoping for good, but not great, job growth, to give central bankers the excuse to keep rates unchanged and let things simmer. Too hot means monetary conditions will have to be tightened sooner, making investors nervous.
Monthly Report: A couple of highlights from the May Global Insight focus on environmental issues:
Keeping it clean: Four key drivers underpinning the GreenTech growth prospects. Companies developing environmentally-friendly tech and their long-term investment opportunities pdf link
Hydrogen -- more than hot air: Hydrogen is the lightest of all elements but might be a heavyweight to clean energy. We lay out five things investors should know about hydrogen’s potential. pdf link
We love May in PG. It’s a month we earned in the six before it. The sun is shining (now) and there are no mosquitoes (yet) -- although I do hear a faint buzzing on the horizon.
Today I’m particularly mindful of a few of my dear clients who lost loved ones this past year. My heart aches for you. Try to remember the good times.
Enjoy your weekend! Happy Mother’s Day this Sunday!