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December 4, 2020 | Robinhood Traders Recreate the 1999 Market

The popular stock-trading application for new investors, Robinhood Markets Inc, was valued at about $11 billion in August. Launched in 2013, the app allows investors to trade stocks in small amounts for zero commission. Robinhood has captured substantial market share in the online stock trading business, going up against giants like TD Ameritrade and E*Trade. […]

November 27, 2020 | Shopping Malls Put To The Test

The demise of the shopping mall has been a topic of interest for years, but the COVID-19 recession is accelerating those changes. The move to online shopping was well underway before February 2020 but, now that many people are afraid to go outside, online could be the preferred option. This holiday season will be a […]

November 20, 2020 | Tesla Joins The S&P 500

Tesla Inc. will join the S&P 500 index as of December 21. At more than $500 billion in value, Tesla will be one of the most valuable in the index, giving the maker of electric vehicles a ranking in the top ten by size. Since there are many index funds and fund managers that track […]

November 13, 2020 | Higher Inflation Would Test Markets

Higher inflation now would be a genuine surprise to markets. Equities and bonds are priced as if low interest rates, even negative ones, will last for years. But recent data show that inflation might not be dead after all. Could inflation rise? What would happen to markets? In the early years of my career inflation […]

November 6, 2020 | Joe Biden and Stock Market Returns

A “clean sweep” on November 4 for Joe Biden and the Democrats looks increasingly possible. To get a “clean sweep” Biden would win and voters would give Democrats a majority in both the House of Representatives and the Senate. What would happen to stock markets? Jimmy Carter won a clean sweep in 1976, after the […]

October 30, 2020 | Joe Biden and Stock Market Returns

A “clean sweep” on November 4 for Joe Biden and the Democrats looks increasingly possible. To get a “clean sweep” Biden would win and voters would give Democrats a majority in both the House of Representatives and the Senate. What would happen to stock markets? Jimmy Carter won a clean sweep in 1976, after the […]

October 24, 2020 | Tesla Beats Expectations Again

This week Tesla’s latest earnings report revealed impressive results. The profit trend continues to improve, with growing auto production, cash flow and net income. Do Tesla shares make a good investment today? Tesla’s fifth consecutive profitable quarter solidifies a trend that has impressed even the most skeptical analysts. Production from the new China factory showed […]

October 16, 2020 | The Second Wave of COVID-19

Six months after the COVID-19 pandemic started, reports abound of significant increases in cases in some countries. The United Kingdom, for example, shows new daily cases higher than any previous peak. How big is this second wave? How will it affect the economy? As recently as mid-September pundits were forecasting a recovery in the economy […]

October 10, 2020 | Clean Energy Wins The Race

Clean energy investing outperformed stock market averages worldwide over the past year. The investment crowd is piling into investments related to renewable energy. Will the clean energy sector continue to outperform? The performance of clean energy companies like Tesla, Vestas and Enphase has been spectacular this year. Funds that specialize in renewable and clean energy […]

October 2, 2020 | The Recession Becomes Real

The Canadian government, the biggest spender of the G7 countries, rushed legislation through Parliament this week that extends an income support program to those affected by the COVID-19 pandemic. This new subsidy under Employment Insurance (EI) replaces the Canadian Emergency Response Benefit (CERB). About 4 million people, or 20 percent of the workforce, were receiving […]

September 26, 2020 | Expectations For Help Are Very High

The optimism about the Canadian economy that appeared in late spring and continued into the summer was created in part by generous government income support and payment deferrals. Now that complacency will be tested as the mortgage deferral cliff, the biggest of payment deferrals, will arrive in October. And income support programs are also expiring […]

September 18, 2020 | Zombies Must Go Now

The number of zombie companies is increasing exponentially. As Japan learned in the 1990s, a predominance of companies that cannot pay their debts is bad for the economy. Central bankers kept interest rates unusually low, helping firms stay alive that would have failed even before this recession. Zombies are a negative force for future growth […]

September 11, 2020 | Bank of Canada Runs Out of Ideas

Monetary policy, as practiced by central bankers around the world, has been ineffective for most of the last decade and longer. In the current crisis, their traditional toolkit, which focuses on manipulating interest rates, has failed. Is there more that the Bank of Canada can do during this economic emergency? Here is an excerpt of […]

September 4, 2020 | Lucky Australia Strikes Out

Australia outpaced Canada in economic terms during the housing and resource boom of the last twenty years. And, unlike Canada, Australia managed to avoid a recession for almost thirty years. A combination of real estate growth and resource-based exports kept the country Down Under growing, until now. Has Australia’s lucky streak come to an end? […]

August 29, 2020 | The Worst Case Scenario Arrives

Canadian banks have yet to feel the full impact of loan losses in this recession. Quarterly earnings for all Canadian banks appeared this week and showed hints of what is to come, although extreme outcomes were not reflected. Are bank earnings showing the full impact of the current recession yet? In May 2019, the Bank […]

August 22, 2020 | The U.S. Election Will Hurt The Stock Market

The U.S. election on Tuesday, November 3, 2020 looks to be a watershed event. The incumbent, Donald J. Trump, is weaker in the polls than most presidents seeking a second term. A change in government, especially if the U.S. Senate majority switches, will have a major impact on policies that affect investors. What can investors […]

August 15, 2020 | Time To Worry About US Stocks

Market valuations in the U.S. have seldom been higher, rivalled only by 1929 and the 2000 peak. These are unusual times as this combination of great market returns since April and a terrible economy has never happened before. How worried should investors be about the U.S. market? One of our favourite charts is the Shiller […]

August 7, 2020 | Gold Price Surges to Record High

Gold is continuing its price surge, hitting new highs of $2,000 per ounce last week. The U.S. dollar has been weak, which is one of the factors pushing gold higher and attracting more speculators to the metal. Could gold continue to hit new all-time highs? I try to avoid visiting a topic too frequently. A Weekend […]

July 31, 2020 | The Fed is Here to Help

The Federal Reserve made no change to its interest rate at this week’s meeting. The media release said that the Fed is worried about the economic impact of COVID-19. The Fed said it will use its “full range” of tools to support growth. What more can the Fed do? The US Federal Reserve continues to […]

July 25, 2020 | Hydrogen as a Clean Energy Source

Hydrogen as a fuel has been promoted for decades. Until now hydrogen fuel cells never gained momentum, in a world dominated by coal and oil and, in the future, battery-electric vehicles, solar and wind. But hydrogen has generated new attention recently as European governments announced new subsidies. Could hydrogen play a bigger role in the […]

July 17, 2020 | A Bold New Plan for Clean Energy

Democratic Presidential nominee Joseph Biden unveiled his clean energy platform this week, which shows an increased willingness to move closer to the progressive wing of his party. The $2 trillion spending proposal is over four years, a dramatic change from his previous campaign promise of $1.7 trillion over ten years. If Biden wins in November, […]

July 4, 2020 | Weak Oil Prices Trigger More Bankruptcies

The recent bankruptcy of Chesapeake Energy Corporation, a pioneer in U.S. shale production, highlights the disruptive change that is roiling energy markets. The COVID-19 pandemic recession has triggered a collapse in demand and prices for energy. Is the failure of some large US-based energy producers going to affect Canadian-based producers? The U.S. benchmark price for […]

June 26, 2020 | Canada Loses its AAA Credit Rating

This week the Canadian government lost its status as an issuer of triple-A-rated debt. On Wednesday, Fitch, one of the three debt ratings agencies, lowered Canada’s rating to AA+ from AAA. Until COVID-19 appeared, the Canadian government was one of the least indebted in the developed world. Over the last two decades, the government debt-to-GDP […]

June 19, 2020 | Massive Government Spending Pushes Debt Ever Higher

The economy is sagging badly during the unusual times brought on by the combination of a recession and the impact of COVID-19. Consumers and businesses have cut spending while government deficits have increased exponentially. But the net result is a severe decline in U.S. Gross Domestic Product (GDP) that will impact us for some time. […]

June 12, 2020 | The Search for a Vaccine for COVID-19

A vaccine for COVID-19 is crucial for a complete economic recovery. While a rebound in activity has started, a return to “normal” requires a vaccine that can be delivered to billions of people. Dr. Anthony Fauci has stated that a vaccine would be ready by the end of 2020, or early 2021. Other articles suggest […]

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