#160 -Pardon The Inflation, NDP and Liberals Giving Away More Money and Apple Lowers Their Phone Prices
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- My take on August CPI
- NDP and Liberals giving Canadians MORE money!
- Apples new product line and what it means
- The Queen and what she meant to two white English guys
- The Emmys and HBO’s Dominance
- The next act in the streaming wars and the Emmys
- Housing Slowdown Is Here
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👉 For specific investment questions or advice contact Joel @ Gold Investment Management.
USA MARKET UPDATE:
The market has rallied on:
Resilient U.S. consumer according to MasterCard SpendingPulse
But interest rates continue to trend higher at the same time (usually move in the opposite direction)
June 9.1% highest since 1981 (40+ year high)
August 8.3% inflation dropped less than expected (8.1% expected)
up 6.3% versus 5.9% in July
10yr 3.4% moved from 3.3% to 3.4% after today’s inflation data
Federal Reserve meeting
next week (Sept. 21)
75-basis point increase in the bag
Federal Funds Target Rate Range 2.25% to 2.5%
The New Expected Range is 3.0% to 3.25%
People are so frustrated over 20 months of bleeding and to an extent, I get it.
But for the young people who are complaining about never having an opportunity to buy stocks, houses, and other assets when times are hard and bad, well you're going to get that opportunity in the next 18 months.
Housing is becoming more affordable than it was in 2020 and 2021, stocks haven't been this cheap on an EPS basis for over a decade...
SAVE YOUR MONEY
Patience is a virtue.
Until money starts to flee the US Dollar, stocks and crypto are going to have a hard time getting going.
I thought it was interesting what Jeff Gundlach said today at the FutureProof conference:
“I’m not going to buy emerging markets until the dollar breaks its 200 day moving average. I like India and I like Asia in general. I also like Brazil and Chile”
💸Reformed Millennials - Post of The Week
Canadian Housing Correction:
I think this comes down to a Variable rate mortgage story. In the short term, this housing repricing is EXACTLY what the doctor ordered.
However, this is almost certainly a short-term story for the Canadian economy when you think 18-36 months out.
The goal of the Bank of Canada and central banks across the board is to find "price stability"
This is a pendulum-swing process.
On the right, we have too hot with cheap money. - Think 2020-2021
On the left, we have too cold with rapidly rising interest rates that threaten to send the Canadian and global economy into a recession. - 2022 - 202?
We need this to get ourselves back to 2019 when we had a manageable inflation number where nobody outside of economists even thought about it.
That will take time.
What will the "202?" be?
I think that's Q1-Q3 2023.
From the attached BNN article:
In Australia and Canada — two of the world’s bubbliest markets — economists anticipate a notable crunch.
While requirements that most Canadian borrowers be stress tested before they get a mortgage make widespread defaults unlikely, a round of belt-tightening that could be felt economy-wide looks increasingly certain. Variable-rate mortgages accounted for nearly 60 percent of all new home loans at the height of the country’s real estate frenzy earlier this year.
Of the roughly half a trillion Canadian dollars’ worth of variable mortgage debt outstanding, about a third have seen their monthly payments go up in line with the central bank’s benchmark rate, according to research from the National Bank of Canada. Combined with things like lines of 40 and fixed-rate mortgages coming up for renewal, these rising interest payments could collectively shave 0.65 percent off Canadians’ collective disposable income over the next three years, the research shows.
“We are at risk of seeing a material slowdown in spending activity,” said Robert Kavcic, an economist at the Bank of Montreal. “We’re not technically forecasting a recession, but we’re very close.”
🐦 Twitter Thread of The Week 🐦
🔮Best Links of The Week🔮
FROM HERMÈS TO ETERNITY - Vanity Fair
Has Mark Zuckerberg Lost His Way? - Annika Constantino CNBC
Starbucks Reinvention at Investor Day - Starbucks
RBC Provincial Outlook - RBC Thought Leadership
Peloton expands Bike rental program nationwide - CNBC