The Week of August 23 – August 27, 2021

Macro Update

• The Canadian dollar rallied last Friday, with gains fueled by broad U.S. dollar weakness following U.S. Federal Reserve Chair Powell’s speech at this year’s virtual Economic Symposium; specifically he said, “At the FOMC’s recent July meeting, I was of the view, as were most participants, that if the economy evolved broadly as anticipated, it could be appropriate to start reducing the pace of asset purchases this year. The intervening month has brought more progress in the form of a strong employment report for July, but also the further spread of the Delta variant. We will be carefully assessing incoming data and the evolving risks.” The Canadian dollar was also bolstered by higher oil prices.
• U.S. July personal income +1.1% month over month, versus +0.2% in June. Personal spending +0.3% month over month, versus +1.1% in June. July Core ‘personal consumption expenditure’ price index +0.3% month over month, versus +0.5% in June.
• U.S. consumer confidence index edged up to 70.3, after a sharp fall last month to 70.2
• U.S. July durable goods orders -0.1% month over month, versus +0.8% in June. The important ‘nondefence capital goods excluding aircraft’ (the best proxy for business capital spending) came in flat month over month, after +1.0% in June. 
• U.S. July new home sales +1.0% month over month, versus -2.6% in June
• U.S. Q2 Gross Domestic Product (“GDP”) gained 6.6% q/q on an annualized basis, versus an increase of 6.5% prior.
• BERLIN (Reuters) – “German exports to China declined for the first time in nearly a year in July, easing by 3.9% year-on-year to 8.4 billion euros ($9.9 billion), the statistics office said on Wednesday. That was the first decline in exports to China, Germany’s second biggest sales market outside the European Union, since August 2020, and it was the biggest slump since May 2020, when the world was gripped in the first wave of the coronavirus pandemic.”
• Reuters – “The Taliban’s takeover of Afghanistan has stoked fears of an exodus of Afghans and a repeat of Europe’s 2016/16 migration crisis, when more than a million people from the Middle East fled to the continent and resettled there.”

William Chin, MBA

Portfolio Manager & Chief Technical Analyst

William Chin, Chief Technical Analyst for Caldwell Investment Management Ltd. (“Caldwell”), is the lead Portfolio Manager on the Tactical Sovereign Bond Fund and Portfolio Manager for the fixed income portion of the Caldwell North American Fund (formerly Caldwell Balanced Fund). He also advises fixed income portfolios for affiliate Caldwell Securities Ltd.’s separately managed account platform and contributes to the Caldwell Investment Management Ltd. team’s research, specializing in macro-economics, currency risk management and technical analysis. William is a member of Caldwell’s Investment Risk Committee.

William has over 35 years of international investment experience in the areas of portfolio, currency risk and treasury management. He began his career in the currency market, progressing to the role of treasury manager for a large international bank. He was first registered as a Portfolio Manager with the Ontario Securities Commission in 1999 and managed high net worth client portfolios on a discretionary basis prior to joining Caldwell.
William has an MBA in economics and international finance. He has been a volunteer and a board member for the Canadian Society of Technical Analysts since 2001 and is their former President (2012-2014).

William is a frequent speaker on macro analysis, monetary policy and technical analysis.

All data is sourced from Thompson Reuters and Capital IQ as of August 27, 2021 unless otherwise indicated. While believed to be reliable, the accuracy of the information cannot be guaranteed. Caldwell Investment Management Ltd. and its affiliates make no representations or warranty as to its completeness, reliability or accuracy.

Investment involves risk, uncertainty and assumptions. The value of investments rise and fall such that there is a risk you may not recoup your original investment. Past performance is not a reliable indicator of future performance.

The views expressed herein of those of the portfolio manager and not necessarily those of CIM. Such views, while based on current market conditions and information, are subject to change without notice such that there can be no assurance that actual results will not differ materially from such expectations. The views expressed are an illustration of broader themes and intended to be for general information purposes only. They should not be relied upon nor construed as investment advice. Readers are expected to consult with their investment advisor for advice specific to their circumstances before making investment decisions.

Forward-looking statements are not guarantees of future results as they involve uncertainties and assumptions; there can be no assurance that actual results will not differ materially from expectations.