Some Kind of Triggering Economic Event …
Having done a great job of fanning the great Canadian real estate “bubble”, the Bank of Canada now warns of risks as far as potential negative feedback effect, in the event of a “triggering event”. Are they trying to pre-emptively wash their hands of any upcoming calamity we should be aware of?
Here is what could happen … IF the proverbial sh*t hits the fan (ok, they obviously didn’t say it that way …)
People, people … we’ve been blind bidding like crazy on real estate it seems (ok you guys have … I haven’t!), leading to prices skyrocketing even in places like … HAMILTON … which has apparently now also reached the ranks of the vastly unaffordable cities (alongside Vancouver and TO … apparently ahead of LA???) oh, VOW! And … nothing against Hamilton, by the way – it’s just that it appears to be a tad odd as far as joining the UBER Bubbly locales 😉 => Read More => Click HERE!
Now we are told, this party could end up badly => and hence, in short order, to qualify for a mortgage, delirious Canadians will have to prove they can withstand rates shooting up to 5.25% (LOL – the economy can’t stomach that period … but individuals have to show they’ll be able to …). Read more => Click HERE!
Big Short – A massive short bet on Tesla by “Big Short” Famous Michael Burry was disclosed => Read HERE!
Bitcoin / Crypto no fun this past week in the Crypto space, which underwent somewhat of a “rout” – courtesy earlier comments from Elon Musk regarding Bitcoin NOT being environmentally friendly … subsequently followed by rumours that Tesla had divested its Bitcoin exposure (acquired in … February?) … which in the meantime apparently was denied …
Finally, though, it was China indicating that Bitcoin wasn’t a currency of settlement, or something to that effect, that really hit hard. Bottom Line: Wild ride in Bitcoin Wednesday, with huge downside followed by meaningful rebound: BTCC-B.TO = low 6.05; close 7.13. No doubt Bitcoin fans not enjoying downward volatility nearly as much as when crypto rockets skyward …
Inflation – Yes, it may be transitory … fingers crossed on that one … because the latest reading in Canada wasn’t exactly “comforting” – coming in at … +3.4% for April, the highest y/o/y reading in 10 years …
Talking of which … combining real estate and inflation … is Lumber the “tip” of the inflation “spear”? Incredible visual: from Visual Capitalist => Click HERE!,
NOT looking pretty … but in case some begin thinking that Lumber is Jupiter bound, I’d note that the folks at Brookfield, who know a thing or two about the space, well … they recently divested a rather large chunk of their West Fraser Timber => Click HERE!
Is it over for FANGMAT? An interesting question for sure – particularly when put in the context of a stock mania of another era – embodied by the “Nifty Fifty” concept aka stocks that were so great … they apparently would forever outperform … (which ended up … NOT being the case … of course…) Sounds familiar? You might wish to have a look at Mark Yamada’s piece on the topic => Click HERE!
(BTW – going back to Michael Burry … 2 names that he is long off as far as short Tesla article … are MSFT and GOOG – so there is an endorsement of sort for at least some of the FANGS, high valuations or not …)
For me – nice to see a recap of FANGMAT exposure across markets – as indeed something for Advisors and clients to consider.
EUROPE – Note as an aside, that some PMs in the US are apparently looking at … EUROPE – partly to move away from the overvaluation of => Click HERE! the US market
and … back to Canada => our “loonie” at … 6-year high … inflation overshooting … real estate bubble … currency heading for the overvalued bin … all of that spells … BE CAREFUL … That said, reopening spells further upside for the Canadian stock market … even if currency moving higher shouldn’t be a given, and even if … real estate doesn’t forever march onward and upward…
CN Rail / CP Rail and Kansas City Southern “battle” => Click HERE! CN Rail looks to be winning the day although still some regulatory hurdles. Ballsy move by CNR which “derailed” (pun intended) CP’s purchase to create a massive rail network stretching across Canada, the US, and Mexico.
WEBINAR = we talked 5G theme with Indxx’s Rahul Sen Sharma and Vaibhav Agarwal as well as FT Portfolios Canada’s Karl Cheong and Colin White this week => click HERE for post-view/replay
Bottom line – still a long runway ahead as far as the opportunity – with shift, over time, taking place from hardware toward apps – the latter taking advantage of what the technology upgrade, taken care of by the former, allows/renders possible going forward (disclosure – long and have been long NXTG for some time, which incidentally was my Lost Island pick for MoneySense magazine both in 2020 and in 2021).
Keep the date open => our next webinar is scheduled for June 23, 2021 (12:00 pm EST), and will focus on Cyber Security – another massive “theme”, very often found in the news, as cybercrime obviously has been another growth area for quite some time … sadly! Register: HERE!
May 2021 distributions:
iShares: => click HERE!
BMO ETFs => click HERE!
Vanguard Canada => click HERE!
respectively HERE for VBU; VBG; and VGAB
Other: Horizons ETFs brought back its “Biggest Winner contest” => Click HERE!
Enjoy this beautiful May 24 long weekend everyone – stay safe, stay healthy 🙂