Jun. 19, 2020

ECONOMIC UPDATE WITH MARTIN LEFEBVRE, NATIONAL BANK FINANCIAL’S CHIEF INVESTMENT OFFICER AND MARTIN GAGNON, CO-PRESIDENT AND EVP

  • We are at the beginning of a new cycle supported by central banks around the world.
  • We expect to have higher debt margins and higher PE ratios in the future.
  • Interest rates will be low for a long time.
  • The focus is on earnings in 2021 and 2022, not 2020.
  • Oil prices will stabilize but not likely move higher until the economy improves.

OTHER COVID-19 DEVELOPMENTS

  • Canada admitted 4,140 new permanent residents in April, down 85% from last year. The number of study visas declined 41% to 19,040.
  • US death toll from COVID-19 now exceeds the number of American soldiers who died in WWI.
  • Mexico is pausing migrant workers travelling to Canada to work on farms because of recent outbreaks on Canadian farms.
  • Amazon has deployed new software which helps warehouse workers maintain safe physical distancing.
  • Larry Kudlow, Director of the US National Economic Council, says the $600/week payments made to some laid off Americans will end as planned on July 31st because the US economy is recovering.
  • Canada extended the CERB (emergency jobless benefit) by 8 weeks, to the end of August.
  • US has narrowed support to 7 candidates for a COVID-19 vaccine.

JUNETEENTH – WHAT IS IT?

  • Juneteenth is a 155 year-old celebration of the emancipation of African Americans from slavery.
  • June 19, 1865, Union Army Major General Gordon Granger arrived in Galveston, TX to inform slaves that they had been freed. Texas was the last state in the Confederacy to receive the announcement.
  • Texas remained a Confederate state until 1865 when Robert E. Lee finally surrendered.
  • Approximately 250,000 slaves were freed on June 19, 1865.
  • This week New York Governor, Andrew Cuomo, declared Juneteenth a state holiday and is proposing legislation to make it a permanent state holiday.

TIDBITS

  • 2020 World Competitiveness Rankings: Canada ranks 8th up from 13th (2018). The ranking is led by Singapore, followed by Denmark and Switzerland. US dropped to 10th from 3rd. Website: https://www.imd.org/news/updates/IMD-2020-World-Competitiveness-Ranking-revealed/
  • Ottawa and Alberta are developing a comprehensive strategy for hydrogen development by the end of September. Hydrogen can be applied to improve fuel efficiency and greenhouse-gas emissions.
  • Elon Musk’s SpaceX has applied for a telecom licence as it prepares to deliver internet to rural Canada.
  • 45% of Americans say their wealth has not improved during the Trump years.