The Week of July 5 – July 9, 2021

Macro Update

• The Bank of Canada’s ‘Business Outlook Survey’ for Q2, 2021, released last Monday, was relatively upbeat. Respondents cited improved expectations for future sales, investment intentions, and employment intentions. The majority of survey respondents expected price increases to be transitory.
• Rising concerns about the Delta variant was cited as one of the triggers for a bout of risk aversion last week. CNBC – “10-year Treasury yield falls to 1.25% amid concerns about economic growth, Covid variant.” The U.S. dollar rallied across the board in its usual role as ‘safe haven’, including versus the Canadian dollar.
• WSJ – “Behind OPEC Deadlock, One Petro-State Looks to Non-Oil Future. U.A.E. wants to pump more, now, so it can invest in diversification before oil demand diminishes.” Crude fell in response, taking the Canadian dollar with it.
• The minutes of the June 15/16 Federal Reserve Open Market Committee (“FOMC”) meeting, released last Wednesday, provided little, if any, new information. 
• U.S. weekly jobless claims 373,000, versus 371,000 prior. Other U.S. employment indicators have been weaker-than-expected as well.
• Released last Friday, the Canada June unemployment rate fell to 7.8%, versus 8.2% in May. The ‘participation rate’ improved to 65.2% in June, versus 64.6% in May. For June, 230,700 new jobs were added, versus a loss of 68,000 in May. However, that gain was a result of an increase of 263,900 part-time jobs and a loss of 33,200 full time jobs. The internals were poor.

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 July 9, 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.