The Week of August 3 – August 7, 2020

Macro Update

• Economic data are starting to reflect global resurgence in case counts. The pandemic was once brought under control through shutdowns, and reopening took the progress away. It would seem that there is a limit within which the economy could operate, until a vaccine is found and the population is fully vaccinated. July employment reports for U.S. and Canada continued to see recovery but further progress might be hard to come by, especially if wider shutdowns are re-imposed.
• Statistics Canada reported that in July Canada added 418,500 jobs. The unemployment rate fell to 10.9% from 12.3% prior.
• The Bureau of Labour Statistics reported that in July, the U.S. added 1,763,000 to ‘nonfarm payrolls’. The unemployment rate fell to 10.2% from 11.1% prior. However, according to Goldman Sachs, “Our trackers suggest that current household employment has fallen by roughly one million since the June survey week, and that as of July 15 the unemployment rate had risen back up to 11.5% after falling to 10.5% in late June (vs. 11.1% in the June survey).”
• There are significant differences in statistical methods used to assemble various employment data, the U.S. Department of Labour likely gives the most comprehensive view of all persons who are receiving benefits. That number remains stubbornly above 30 million.
• Separately, Challenger, Gray & Christmas, a leading outplacement and training firm based in Chicago, reported that layoffs are rising again.
• Spending by credit cards has leveled off, according to Chase, a unit of JP Morgan.
• The weak U.S. dollar has raised doubts regarding its reserve currency status, but there is no viable alternative. The Japanese Yen is too small a pool and the Eurozone is inherently unstable, both politically and economically.
• The good news is, developments in the medical research community have been promising. Reuters – “Fauci expects tens of millions of coronavirus vaccine doses at start of 2021…Fauci said there could be a billion vaccine doses available by the end of 2021, and that he is hopeful the world could get past the pandemic that has claimed more than 700,000 lives worldwide by then, with the help of a vaccine.”

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 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 7, 2020 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.