To my clients:
It was a mostly down week for North American stock markets with the Canadian TSX finishing flat at 0.0%; the U.S. Dow Jones Index finishing down 1.7%; and the U.S. S&P 500 finishing down 2.5%.
Quite frankly, I struggled for content this week. To my lens, I view the weakness in markets the past two weeks as giveback of excessive optimism, and not necessarily based on any fundamental rationale… yet. In the short term, if the weakness continues I’ll likely bring portfolio equity up to a full neutral, or slightly beyond neutral, weighting as early as next week. I will not, however, go to an outright overweight position any time soon. I’d like more clarity as to how the return to school and cooler autumn temperature impact covid case curves before making such a commitment. These are not likely to become apparent until well into October, if not November.
I contemplated some discussion of vaccine developments, but let’s just say that at least one vaccine looks probable by the end of 2020. However, availability, distribution, and the question of willing acceptance by populations to be vaccinated led Dr. Anthony Fauci to today suggest that a “full return” to pre-pandemic “normal” is not likely until the end of 2021 – despite vaccine approvals likely coming in the next three months.
That’s it for this week. All the best and stay safe,
Nick
Nick Scholte, CIM, FCSI
Vice-President & Portfolio Manager
Scholte Wealth Management
RBC Dominion Securities Inc. │ Tel: 604.257.7569 │ Fax: 604.235.9950
3200-1055 West Georgia │ Vancouver, BC │ V6E 3P3
Toll Free: 1.844.665.9900 │Email: nick.scholte@rbc.com
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Any recommendations herein are for the exclusive use of clients of RBC Dominion Securities and Investment Advisor Nick Scholte. Any other direct or indirect recipient of this email should consult with his/her own licensed investment advisor prior to implementing any investment action he/she may be contemplating.