Sad as it is, the Covid Struggles of the Developing World are Unlikely to Derail the Recovery in Economically Advanced Nations

Apr 23, 2021 | Nick Scholte


As North America gears up for its-post pandemic future, it feels right to acknowledge the struggles of the developing world.

To my clients:

It was a down week for North American stock markets with the Canadian TSX finishing down 1.3%; the U.S. Dow Jones Index down 0.5%; and the U.S. S&P 500 down 0.1%.

Short update this week…

While the U.S. continues to surge toward its post-pandemic future, and regions like Europe and Canada lag but can nonetheless see the light at the end of the tunnel, the developing world is struggling. Particularly India and Brazil, but many other countries as well. Frankly, given the country’s population density and widespread poverty, I’d always worried about the swath of devastation the pandemic would leave in a country like India. Truly it’s a sad and gut wrenching story. Further, little, if any, short and intermediate-term assistance might be forthcoming given the developed-world’s understandable focus on inoculating and protecting their own respective populations. While the economic and/or investing relevance of this story may be limited, it felt right not to turn a blind eye to the growing bifurcation between developed and developing nations.

Because a bifurcation is clearly occurring. Canada’s case count looks to have plateaued, while the BC numbers look to have started the trend back down. In the U.S., economic data continues to be stellar. Like many other measures of late, Purchasing Manager Index data (a measure of manufacturing I don’t typically comment on) reached a new all-time high. Weekly jobless claims continue to fall. Housing in both countries is white hot. Paraphrasing a comment I made a couple of weeks ago, the U.S. is in the throes of coming out “the other side”, and Canada is actively – and somewhat prematurely – anticipating it.

I’ll watch with interest and compassion the struggles of the developing world but, again, I suspect it will do little to throw off-track the economic freight train of advanced nations.

That’s it for this week. All the best and continue to stay safe,


Nick Scholte, CIM, FCSI

Vice-President & Portfolio Manager

Scholte Wealth Management
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