It’s the end of summer and the long sunny days are quickly dwindling away. As we enter September, children are getting ready to go back to school and many adults are getting ready to go back to work. Life has changed in the last 6 months and now we await to see if the original projections of a second wave are going to come to fruition.
Congratulations! We are officially halfway through the longest year ever, we should all get two birthdays this year for everything we have been through. This year has quite the roller coaster but more than ever before it has been a year of change, years from now we may be telling our kids of year’s pre-2020 and post-2020. As an extension of this, the investment market is also reacting and companies that fit the mold of the future are prospering and companies of pre-2020 are falling behind.
The main driver pushing the market higher in the cooperation from the US Federal Reserve. They have cut twice this year and have given the tone that they will continue to monitor the economic data and will continue to cut if need be. This is much different than the rhetoric last year when they had a steady rate increase plan for the foreseeable future.
This month brought us some interesting news from Canada, as Prime Minister Justin Trudeau won the Federal election to return for a second term as the leader of Canada. There has also been some progress in the US/China trade talks and the US Federal Reserve has decided to cut rates once again. We also came closer than ever to a BREXIT deal that eventually was shut down, but it shows there is at least some progress being made. Many of the major headlines have either concluded, are in the process of being resolved or shine a positive light towards the markets. This should give investors more predictability going forward which should drive markets higher.
As the yearly returns can attest this year has been something rarely seen, SIMULTANEOUS GLOBAL GROWTH. The economic numbers from around the world have been steady as the result of monetary stimulus taking hold and elevating the markets. Not surprisingly, equities have been the place to be, because with new money being pushed into the market (quantitative easing) and zero or negative interest rates (guaranteed losing return); where else could you get a return on your investment?