To my clients:
A reminder to clients that I will be away from the office next week. As usual, I will be connected while away and monitoring developments. Brenda will be available to accommodate urgent inquiries.
It was a mixed week for North American stock markets with the Canadian TSX finishing up 1.5%; the U.S. Dow Jones Index down 0.1%; and the U.S. S&P 500 down 0.1%.
Short update this week highlighting some important themes in the economy, market and client portfolios:
- Inflation continues to moderate as evidenced by this morning’s benign PCE measure of inflation (the preferred metric monitored by the U.S. Federal Reserve)
- Economic conditions are notably stronger in the U.S. than in Canada
- Interest rate cuts have begun in Canada and are expected to begin before year-end in the U.S.
- Halfway through 2024, as in all of 2023, U.S. markets continue to significantly outperform Canadian markets
- Via two separate portfolio adjustments I made in Q2, the equity (i.e. stock) portion of client portfolios are now overweight the U.S. vs Canada (previously, it was a 50/50 split)
- In response to a common client question, I’d assert (as I always have) that regardless of who wins the U.S. election, the U.S. economy is a machine that supersedes the leadership of the moment. That’s not to say that presidential policies don’t have an impact, but the greater force remains the diverse and pervasive business culture of the United States. Repositioning client portfolios in anticipation of a U.S. election outcome is not something I intend to do.
That’s it for this week. Next update on July 12th. All the best,
Nick
Nick Scholte, CIM, FCSI
Senior 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
Visit Our Website: www.nickscholte.ca
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