August started off with a quick selloff. History has shown that selloffs in bull markets are fast and furious, and this one was no different. Since that early selloff, both markets did very little over the rest of the month.

On the U.S. front, the Federal Reserve mentioned a change in policy stance, and it looks likely we will see a rate decrease in September. When you step back and look at the bond market, we are seeing short -term rates getting lower than the long-term rates, which is a good sign for both the economy and the markets. We have several events ahead of us, the biggest being a U.S. election – along with the uncertainty it may bring. Also, the conflicts with the middle east and Ukraine remain a concern worthy of paying attention to.

In Canada, our economy is not as strong as our U.S. partner, and we will most likely be cutting rates at the next three meetings into year end. It has been a challenged market this past month with energy and some financials being a drag, but a bright spot has been real estate. I continue to like the energy sector as the profits and return on equity remain well below market multiples. Worth noting, even though some financials had a rough quarter, they remain good core holdings.

Europe and China both have several challenges, and we remain underweight in both these areas. The magnificent seven companies in the U.S. have been getting all the attention, especially Nvidia with its earnings and forward guidance outlook coming before the end of this month.

With September comes a large number of corporate earnings reports and forward guidance – and I do expect volatility. As such, we will continue to be on the lookout for investment opportunities. There are many overlooked companies right now with decent growth and earnings, and this is where our attention is focused.
At time of writing, we await August news, and the fall events to come.