Good afternoon,
Another gloriously sunny fall day in the central interior, as markets continue to stutter upward, despite political wrangling.
In this week's issue of Global Insights:
Fiscal Policy Progress – Congress looks poised to pass a combination of infrastructure and social legislation that could mean trillions of dollars in government spending over the next decade. We put the politics aside to look at what it could mean for U.S. growth and inflation
GDP data findings – S. consumers sit on their wallets, but not for the reason you might expect.
Regional highlights: S&P/TSX Composite is on pace for a solid year of gains; European Central Bank remains in transitory-inflation camp; China deems property market risks manageable.
Full PDF Here:
Higher-income Canadian households built the biggest savings stockpile (see chart below from RBC Economics): “Canadian households accumulated the highest amount of excess savings among G7 countries during the pandemic, as estimated by the IMF in October. By our count, household put away about $280 billion in extra savings compared to pre-pandemic trends. By our estimation, households in the highest income quintile held a little over 30% of overall excess savings, compared to just 10% held by households from the lowest income quintile. That matters when thinking about the amount of the excess savings that will be spent in the near-term.”
Oh how the Turntables Return: The sentence: “I was in my room cleaning off a dusty needle,” might sound terrifyingly suggestive of a drug problem to millennial ears. But in 1975 it meant the record player’s needle got gummed up with dusty bits. A quick pick of the pocket-fluff-like dustball, and little second hand Victrola box phonograph was functional again. Well, it’s back. As the chart below shows, the once mighty CD has been eclipsed by Gen Z’s steam punkish fad passion for vinyl.
That old record player, like my clothes and all our furniture, was from the local charity thrift shop. My dad’s theory was that a dollar spent on clothes and furniture was better saved for fishing and camping gear. (Tough to argue with a dude who washed his hair with a bar of soap). And… I’ll just say he didn’t splurge on deodorant. I didn’t even know it was a thing until I was around 15.
He came home once with a bag of leather scraps he picked up for a couple of dollars, and proceeded to paste them randomly on his favorite TV chair. It actually looked pretty cool for about a week, until the clumps of glue hardened and turned crispy, then peeled around the edges, giving it the appearance of a sickly sea turtle.
Have a good weekend!
Mark