July continues to climb higher; however, the speed at which the moves are happening is slowing down. July historically has always been a relatively good month, and this year proves to be no different. I am seeing some exhaustion in the markets and a pullback could be a higher probability in August. Earnings season is ending soon, and with a federal rate decision and more tariff news coming, these could all be short term catalysts for a small selloff, and this would be a good thing. Earnings have been very good and as the tariff news gets more and more known this becomes less of an uncertainty for the markets. I expect the noise to get ramped up in August, especially regarding countries and tariff deals, this will provide some volatility short term, but a good potential close into year end.
Canada is in the cross hairs of the U.S. trade tariffs and I expect a conclusion in August some point. In the meantime, I do like the progress inside our country to lower cross border trade issues and we seem to be looking for good long term capital projects which will benefit Canada over the long term. I do think once the U.S. issues are resolved, we might get a nice rebound in Canadian stock markets, and we remain positioned for this.
A lot of investment dollars have chased returns in Europe to avoid the U.S. uncertainty. I am in the camp who believes this is not a good long-term strategy and as the noise quiets down we will see the flow of funds going back to good growth opportunities and those are not present in Europe. Our position in European holdings is light. China remains a country that we continue to avoid as we do not seem to be close to any trade agreements and their economy remains weak. I continue to like the themes of cybersecurity, housing, infrastructure and Power. I continue to build our portfolios around these, and a pullback in these areas will be a welcomed opportunity.
On a side note, July presented our office with a major flood that effected the whole building, we had to scramble to get set up again to continue to serve you, our clients. I give our team credit for their resilience and dedication to not letting client service suffer and quickly being able to reestablish smooth operations. Diane is still answering all your phone calls, and we have been fortunate to find some boardroom space available in Simcoe to conduct meetings with the balance of our team working steadily on your financial well-being every day. I would like to personally thank all of our clients for your understanding and support. It may be a little bit before we get an office back to normal, but we are well positioned to continue to service all of your needs and manage your financial wealth. Please do not hesitate to contact us if you need
anything, we are here to help.