Goldilocks World- still? (TWTW, Aug 2-6, 2021)

Jobs data – Friday’s US Non-Farms payroll data for July 2021 exceeded expectations by close to 100,000, coming in at +943,000 versus (e) 845,000, to which markets responded positively. For some time now, the conundrum has been that IF the job data was seen to be to strong, it may lead to the FED tapering its bond buying program sooner as opposed to current expectations, respectively rates would rise earlier than communicated / anticipated by current consensus and guidance. On the flipside of that, should unemployment come in too weak, while this would speak to the risk of a faltering economy (too much Delta-variant related headwinds?), which ought to possibly trigger some potential market weakness … well, if that were the case, so the thinking goes, the FED would remain accomodative longer which … would then be seen as market supportive and thus a positive. Tail you win, head you win, and markets in this TINA (There IS NO Alternative) world of ours, would keep on keeping on … Read More => Click HERE!

Of note re: Friday’s action – as pointed out by Leuthold’s Jim Paulsen (Chief Investment Strategist), 10 year yield backing up; and possibly a shift in market dynamics in terms of leadership, away from recent large cap tech growth dominance, and back to smaller cap; cyclicals; and possibly international – THAT … is worth keeping an eye on in coming weeks…

At some point this self-reinforcing conviction could be challenged … don’t you think? Presumably at some stage, prices already reflect this good news is good news and bad news is good news dynamic – no? And if so, well, presumably we’d be looking at either sideways action at best, spikes of volatility, and respectively some possibly not inconsequential downside risk … But for now … that’s not the scenario. The scenario at this point is … the stock market remains supported by a strong earnings backdrop.

Question: Will we see a FED announcement later this month – come from their annual meeting in Jackson Hole (Aug 26-28, 2021)? Stay tuned!

Regulatory framework in Canada – The regulatory backdrop as far as the Canadian Financial marketplace is concerned will see IIROC and MFDA merge, as announced this past week => Click HERE to read! This shouldn’t exactly come as a surprise, as ultimately, in this world of convergence of ours (convergence between the world of Mutual Funds and ETFs, for instance …), well, that’s what you should expect to see happening: a convergence of regulatory framework guiding participants in the industry. THAT, coupled with Client Focused Reforms, presumably ought, ultimately, to level the playing field for market participants … AND, if all goes well, one is to hope … ultimately lead to better service and better outcomes for clients, whether they currently be with IIROC, or MFDA Advisors. Time will tell 🙂

BMO ETFs – Mid-year 2021 Report => Click HERE!

China – Given recent events in China, and the detrimental impact this has had overall on the EM space, in case you haven’t come across Perth Tolle from Freedom Indices … maybe you should explore what Perth and her colleagues have been up to: Click HERE!

Upcoming “Thematic” ETFs Investing Summit 2021 (August 24-26, 2021) and Annual Mindpath Virtual Conference (8th annual ETF conference) => Click HERE! 

Talking about Thematic – Thematic and disruption often go hand in hand … =>Looking at Disruptive Innovation: Evolve Blog update: Click HERE!

Canadian Housing … the valuation related charts they keep a coming … perhaps unsurprisingly so … What is it I recently heard? 39% of Canadians who have purchased a house in the past 18 or so COVID-19 months basically being unable to afford pretty much anything BUT to pay their mortgage…? Ouch … even at non-existent interest rates … payments hurt if they are based off of a massive mortgage amount … one which has obviously done nothing but grow significantly, accompanying sharply rising prices. When will the madness end?

Recent Crude prices = price action: greatest weakness in some time:

Is that foreshadowing market problems in the context of the DELTA Variant and how we will fare this fall? Will this week’s Payroll data offset that notion / risk? As we keep reading about the Delta Variant (and now what is it? Delta+?) let’s remember that COVID-19 will stay with us in one way form or shape likely for some time into the future … the key, however, is vaccinations, and their efficacy. All, ultimately will depend on hospitalization rates (are we seeing hospital systems overwhelmed?) and, mortality rates (does the virus kill even in the presence of vaccines …) EVERYTHING else … may well turn out to be noise …

Have a great week!