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Hello everyone. Welcome to the weekly roundup. Today we will cover job numbers, inflation, and market strategy. Hello Ben.

Hi Eva. How's it going today? It's going pretty good. Pretty good. Nice. It's still summer. I was about to complain about the heat and then I got the notification about the time change on November 1st and I'm like, don't complain. That's coming. I wouldn't even complain. It's coming soon. Yeah.

I was about to complain about the heat and then I got the notification about the time change on November 1st and I'm like, don't complain.

That's coming. I wouldn't even complain. It's coming soon. Yeah.

Okay. So, we're going to start with job numbers. The US lost jobs in July. Um but Canada posted a strong gain. Um although much of that growth was from self employment. Um what do these contrasting numbers mean for both economies?

Although much of that growth was from self employment. Um what do these contrasting numbers mean for both economies?

Yeah, I think I'll start with the US and then we'll talk on Canada. But certainly with the US, we've seen that the job market deteriorate uh which is interesting. We've been bit higher inflation, cheering job numbers. I mean, we've talked about the the consumer stretched in the US. Um higher mortgage rates in the US. So that I think paints not a great picture. Um I know we'll talk about wash later and we can comment more on that on that at that point.

Interesting. We've been bit higher inflation, cheering job numbers. I mean, we've talked about the the consumer stretched in the US. Um higher mortgage rates in the US. So that I think paints not a great picture. Um I know we'll talk about wash later and we can comment

But then if we look at Canada, I mean Canada's jobs numbers are so choppy. Um and uh to your point, it was quite a good beat on the headline um under the surface self-employed. You know, self-employed is a uh not a great one that you'd want to see growing dramatically, at least uh historically. Maybe we've reached a new paradigm where self-employment is more of a of a long-term permanent um jobs, but typically you're you're looking in um public or private sector jobs tend to be more highquality full-time jobs where self-employed tends to be a little bit more of a sense that people are feeling strained trying to start up, trying to build businesses to help them succeed. So, I don't think it's super healthy.

and uh to your point, it was quite a good beat on the headline um under the surface self-employed. You know, self-employed is a uh not a great one that you'd want to see growing dramatically, at least uh historically. Maybe we've reached a new paradigm where self-employment is more of a of a long-term permanent um jobs, but typically you're you're looking in um public or private sector jobs tend to be more highquality full-time jobs where self-employed tends to be a little bit more of a sense that people are feeling strained trying to start up, trying to build businesses to help them succeed.

So, I don't think it's super healthy.

And if you look at what our economics team said, they said effectively this doesn't change their outlook. We still think rates don't increase at all in Canada this year, potentially Q1 next year depending on how things play out in the remaining part of the year. Uh but it doesn't change the picture, the job speed at least at this point.

Canada this year, potentially Q1 next year depending on how things play out in the remaining part of the year. Uh but it doesn't change the picture, the job speed at least at this point.

Okay. Um speaking on rates, inflation show some sign of cooling. Um is that enough for the Feds to stay on hold? Um we know that oil prices are still elevated.

We know that oil prices are still elevated.

Yeah. So at least right now um the inflation numbers gave them a bit of a sigh relief. I think at least uh wash doesn't have as much pressure in September. I think you know it went from something like 70% likelihood of a raise to 46% likelihood of a raise after the CPI this morning. So, you know, we still think they don't raise rates in September. Um, but it it did have a material impact on what the market's thinking.

doesn't have as much pressure in September. I think you know it went from something like 70% likelihood of a raise to 46% likelihood of a raise after the CPI this morning. So, you know, we still

Um, but this the tariffs that are happening continuing to happen in the US continue to put pressure on inflation in the in at least in the US right now. So, it's going to be meeting by meeting. War has talked to about getting rid of forward guidance. I mean, you mentioned last week maybe not having as many meetings. So, that's going to disrupt the apple cart from a perspective of what the market's thinking. And so, I think it's something to be conscious of. But, at least right now, the CPI prints given them a reprieve and likely push that potential rate increase to later this year depending on how things play out likely in the Middle East right now.

are happening continuing to happen in the US continue to put pressure on inflation in the in at least in the US

right now. So, it's going to be meeting by meeting. War has talked to about getting rid of forward guidance. I mean,

you mentioned last week maybe not having as many meetings. So, that's going to disrupt the apple cart from a

perspective of what the market's thinking. And so, I think it's something to be conscious of. But, at least right now, the CPI prints given them a

reprieve and likely push that potential rate increase to later this year depending on how things play out likely in the Middle East right now.

Okay. Um so just on the markets, gold is rising. Um bond yields are elevated. Um is this a sign that investors are becoming more cautious or is this are inflation and interest rate expectations you know driving uh this dynamics right now?

is this a sign that investors are becoming more cautious or is this are inflation and interest rate expectations you know driving uh this dynamics right now?

Yeah. So that's uh many things. I think the gold piece continues to be something interesting. And as the world's currencies have been devalued by massive money printing by governments, you're seeing that attention with gold. Like if I remember the number off the top of my head, something like 36,000 tons of gold are held by the central banks around the world. And that number continues to increase. So, I would say it's become more of a currency than it has in a decade. And so, you probably see that safety play coming back into it. And gold's probably found a reasonable level here. Does it double or anything like that like people think? Who knows? But I think it's trading much more like a currency now.

Interesting. And as the world's currencies have been devalued by massive money printing by governments, you're seeing that attention with gold. Like if I remember the number off the top of my head, something like 36,000 tons of gold are held by the central banks around the world. And that number continues to increase. So, I would say it's become more of a currency than it has in a decade. And so, you probably see that safety play coming back into it. And gold's probably found a reasonable level here. Does it double or anything like that like people think?

Um, that has resulted in quite a bit of up and downside with gold and silver miners over the past couple of weeks. We've had a pretty good move like barracks up 18% in the past week and a half. So the the companies themselves are going to be quite volatile off of it, but your point's right about where where gold plays a role in the world. downside with gold and silver miners over the past couple of weeks. We've had a pretty good move like barracks up 18% in the past week and a half. So the the companies themselves are going to be quite volatile off of it, but your point's right about where where gold plays a role in the world. As for elevated rates, I mean, I think it's an interesting one that we need to be conscious of and pay attention to because elevated rates when at least historically when they got high enough, the big money and the actuaries said, "Okay, now we can at least take some profits on our equities and buy duration because it's going to match our liabilities." Um, and so the levels that some of the bonds are at in the world these days is starting to attract that attention. um um but yields still creep up and the higher the yield goes on the long end in the US like at a 520 right now that's pushing um mortgage rates up to 7% or so and historically that 7% number has been a huge drag on the US economy and so you know if you get a slowing economy that's also going to pull inflation down with it and so I think there's a lot of dynamics that we need to watch and pay attention to right now um So, I don't know if that answers your question, but those are a lot of a lot of kind of moving parts that we're watching. historically when they got high enough, the big money and the actuaries said, "Okay, now we can at least take some profits on our equities and buy duration because it's going to match our liabilities." Um, and so the levels that some of the bonds are at in the world these days is starting to attract that attention. um um but yields still creep up and the higher the yield goes on the long end in the US like at a 520 right now that's pushing um mortgage rates up to 7% or so and historically that 7% number has been a huge drag on the US economy and so you know if you get a slowing economy that's also going to pull inflation down with it and so I think there's a lot of dynamics that we need to watch and pay attention to right now um So, I don't know if that answers your question, but those are a lot of a lot of kind of moving parts that we're watching.

Yeah, those are the charts. All right. So, we are recording this on August 12th around 1:00. Um, and anything that happens between now and next week, we will comment on then.

All right. So, we are recording this on August 12th around 1:00. Um, and anything that happens between now and next week, we will comment on then.

So, we'd I thought we'd start off with this with uh what's going on in the straight because there's lots of noise, lots of things going on. It's opened, it's closed, it's a deals happening, it's coming, it's not coming. Um so, I thought this was a good data set to look at because, you know, before the the conflict started between US and Iran, um things were moving along fairly normally. you know, you're looking at 50 to 80 ships a day going through there. We did go down to zero temporarily. We bounce back up and now the Iranians seem to want something that represents like a gate charge effectively. You come in to this straight, you pay us a charge to do that. We can board, we can look at everything. Um, and you know, as a result of that request and the negotiations, you know, we continue to be under pressure here. So, I think this is a good reminder. We're not out of the woods yet. Headlines maybe look a little bit better, but this continues to be the setup we have and it's something we need to continue to be conscious of around your questions around inflation and such. This is a key piece to how things play out the next little bit this year. it's closed, it's a deals happening, it's coming, it's not coming. Um so, I thought this was a good data set to look at because, you know, before the the conflict started between US and Iran, um things were moving along fairly normally. you know, you're looking at 50 to 80 ships a day going through there.

We did go down to zero temporarily. We bounce back up and now the Iranians seem to want something that represents like a gate charge effectively. You come in to this straight, you pay us a charge to do that. We can board, we can look at everything. Um, and you know, as a result of that request and the negotiations, you know, we continue to be under pressure here. So, I think this is a good reminder. We're not out of the woods yet. Headlines maybe look a little bit better, but this continues to be the setup we have and it's something we need to continue to be conscious of around your questions around inflation and such. This is a key piece to how things play out the next little bit this year.

Next one, the forward curve for oil prices. And so I did comment a little bit on it today just around what's been happening and why China is playing a major role in oil. I just will add that into the last part of this conversation. But if we look at prior to the invasion, what's going on with uh with future prices, that's the February 27th, the dark line at the bottom. You know, we think oil is 60 to $65. We had a huge spike when it first happened, but now we've migrated down to here, which is that forward curve has continuing to tick tick tick back down. And we still think that forward price is still showing you down kind of 70s 6070s, which is interesting just when you think about the potential ramifications around inflation. If you believe inflation's coming back, this number should be a lot more elevated.

happening and why China is playing a major role in oil. I just will add that into the last part of this conversation.

But if we look at prior to the invasion, what's going on with uh with future prices, that's the February 27th, the dark line at the bottom. You know, we think oil is 60 to $65. We had a huge spike when it first happened, but now we've migrated down to here, which is that forward curve has continuing to tick tick tick back down. And we still think that forward price is still showing you down kind of 70s 6070s, which is interesting just when you think

So the one key piece which I mentioned in the daily was just around how China's been drawing down materially on the reserves and so they have cut back um something like 5.5 million barrels a day drawing on the reserves and that's taken a lot of pressure out of the price and inflation in the world. So that'll be a key piece to think about. Can they continue to do that? Is there any way they can get more oil out of Russia which they've been doing? So these I think are important pieces to think about. what's the potential for higher oil prices?

Which I mentioned in the daily was just around how China's been drawing down materially on the reserves and so they have cut back um something like 5.5 million barrels a day drawing on the reserves and that's taken a lot of pressure out of the price and inflation in the world. So that'll be a key piece to think about. Can they continue to do that? Is there any way they can get more oil out of Russia which they've been doing? So these I think are important pieces to think about. what's the potential for higher oil prices?

Um the last one before we jump into my discussion around yen US dollar which is Canadian inflation. Um so they like to look at many different things depending on the setup in the world. But this blue line is the uh well headline inflation. So that takes into account everything core is this other thing that got made up along the way. this red line which is we want to strip out the volatile things which is food and energy which is effectively all that we live on every day but they strip that out in core which uh if you're a central banker you're going okay it's between my zero and 2% level core so I'm fine I don't need to do anything don't need to increase rates I don't need to cut rates um and to your point around headline yes it's come down and that'll be an important piece to watch do they catch up and match up um this is going to play a part as to what happens with rates in Canada, but at least right now because cores come down, we think we're on hold. Look at many different things depending on the setup in the world. But this blue line is the uh well headline inflation.

So that takes into account everything core is this other thing that got made up along the way. this red line which is we want to strip out the volatile things which is food and energy which is effectively all that we live on every day but they strip that out in core which uh if you're a central banker you're going okay it's between my zero and 2% level core so I'm fine I don't need to do anything don't need to increase rates I don't need to cut rates um and to your point around headline yes it's come down and that'll be an important piece to watch do they catch up and match up um this is going to play a part as to what happens with rates in Canada, but at least right now because cores come down, we think we're on hold.

Last one just before we wrap up, and I've talked about this, I know in the last multiple calls, I thought this was a great chart just to think about the potential ramifications. Um the US dollar and the yen is the most liquid cross currency cross in the world and they play a major part for what goes on in asset prices. For decades you've been able to borrow the yen at effectively zero. That level's higher now. Effectively borrow the yen and then invest in US dollars and hedge out the currency risk and always make a carry. And if you're a big institution or hedge fund, you could do that. You could put 10 times leverage on your trade. You could take risk-free assets and make 10 15%. But what's happened right now is that yen kept going down, down, down. And the Japanese government says we're not really happy with where we're at right now. And the spread between rates continues to widen.

Um the US dollar and the yen is the most liquid cross currency cross in the world and they play a major part for what goes on in asset prices. For decades you've been able to borrow the yen at effectively zero. That level's higher

Um and so the last couple of weeks what we've seen is we've seen an environment where the Japanese government and the US government has intervene to try to boost up the yen because they're concerned about the levels. And so this is section of this chart is effectively the biggest risk. If we get a risk off, what happens is um institutions, hedge funds, they start selling their assets that they own in the US and a lot of that would be in tech and S&P and NASDAQ and such. They would sell those assets, bring them back to uh Japanese yen. So you get yen strength and you get weakness in the markets and the currency which is a double whammy. So, I think this is a real risk to the overall markets at this point.

And if you're a big institution or hedge fund, you could do that. You could put 10 times leverage on your trade. You could take risk-free assets and make 10 15%. But what's happened right now is that yen kept going down, down, down.

And the Japanese government says we're not really happy with where we're at right now. And the spread between rates continues to widen. Um and so the last couple of weeks what we've seen is we've seen an environment where the Japanese government and the US government has intervene to try to boost up the yen because they're concerned about the levels. And so this is section of this chart is effectively the biggest risk.

And, you know, I think I was thinking about this this morning and thinking, you know, how much of a risk is it relative to other types of events we've seen in the past? I'd say this one is more of an acute risk as opposed to like the housing crisis or any of these other types of events that we've seen because this one can turn and react very quickly um because money moves uh back and forth very very quickly. So, I'd say this is an acute risk that we need to think about. We do own some yen inclined portfolios as a hedge in this in case this plays out, but I think it's a key piece that what could potentially happen in the markets over the next 69 months.

The US and a lot of that would be in tech and S&P and NASDAQ and such. They would sell those assets, bring them back to uh Japanese yen. So you get yen strength and you get weakness in the markets and the currency which is a double whammy. So, I think this is a real risk to the overall markets at this point. And, you know, I think I was thinking about this this morning and thinking, you know, how much of a risk is it relative to other types of events we've seen in the past? I'd say this one is more of an acute risk as opposed to like the housing crisis or any of these other types of events that we've seen because this one can turn and react very quickly um because money moves uh back and forth very very quickly. So, I'd say this is an acute risk that we need to think about. We do own some yen inclined portfolios as a hedge in this in case this plays out, but I think it's a key piece that what could potentially happen in the markets over the next 69 months.

As always, the opinions expressed do not necessarily reflect those of National Bank Financial. Um, everyone has their own risk tolerance and levels. If you do have any questions about anything we spoke about today, please feel free to reach out to Eva or I and I'm happy to address and answer any of those questions that you may have.

have any questions about anything we spoke about today, please feel free to reach out to Eva or I and I'm happy to address and answer any of those questions that you may have.

Thank you, Ben. Welcome. Uh what's on the agenda for next week?

Uh so we're still making our way through earning season. So that's uh been pretty big divergence again. um if companies come in line, the market tends to not like it. You really have to beat expectations for that to happen. So, we've seen some, you know, some really good and some really bad numbers this week. And so, we continue to watch that. Um the Canadian uh earnings reports starting to come out in a little bit more detail.big divergence again. um if companies come in line, the market tends to not like it. You really have to beat expectations for that to happen. So, we've seen some, you know, some really good and some really bad numbers this week. And so, we continue to watch that.

The thinner markets in August also tend to be interesting and worthwhile paying attention to. Um, even with the with regards to the yen, you could potentially see more intervention there. In a thinner market, you have to put less money in the in the market in order to have a positive and or negative impact. And so, we continue to stay on our toes um as we start to head into September, October. Spoke with a client earlier this week and said, "Isn't September October typically the most uh volatile months historically?" And the answer is yes to that. And so try to get ready and prepared for what's uh what's coming this next quarter. Okay, sounds good. Thank you everyone.

The thinner markets in August also tend to be interesting and worthwhile paying attention to. Um, even with the with regards to the yen, you could potentially see more intervention there.

In a thinner market, you have to put less money in the in the market in order to have a positive and or negative impact. And so, we continue to stay on our toes um as we start to head into September, October. Spoke with a client earlier this week and said, "Isn't September October typically the most uh volatile months historically?" And the answer is yes to that. And so try to get ready and prepared for what's uh what's coming this next quarter. Okay, sounds good. Thank you everyone.

Remember to visit, subscribe, and follow us on YouTube and LinkedIn at hard investment group. The link to our daily financial heartbeats will be in the caption of this video or in your email box if you're subscribed. For our clients, please reach out to me if you have any questions or if you'd like to book a review meeting with Ben. Thank you once again for listening everyone. Enjoy the rest of your week. Bye..

Hello everyone. Welcome to the weekly roundup. Today we will cover interest rate risk, geopolitics, and earnings releases. Hello Ben.

Hi Eva. How's it going? Oh, good. How are you? Good. I'm good. It's nice out, so possibly take a walk sometime. It's a good idea. Yeah. Enjoy it before the white walkers arrive. Unfortunately, that'll be soon enough.

Good. I'm good. It's nice out, so possibly take a walk sometime. It's a good idea.

Yeah. Enjoy. It's before the whites the white walkers. Unfortunately, that'll be soon enough.

We’re going to start off with interest rates. Fed Chair Kevin Warsh has floated the idea of holding fewer policy meetings, which could potentially reduce the amount of guidance the market receives. What impact could this have on investors and market volatility? fewer policy meetings and this could potentially reduce the amount of guidance the market gets. Um what impact could this have on investors and you know market volatility?

I think that’s a great place to start. One of the key points he made before coming into power was that he was going to do away with forward guidance. If he moves to a point where he is speaking a lot less, it would be a huge adjustment for markets. They have been used to steady updates since Alan Greenspan’s era in the 1990s, so it has been a long time of hearing that kind of rhetoric around what is happening and how the economy is performing. If they pair reduced communication with continued economic data flow to markets, it may calm some nerves and volatility. But if they simply eliminate forward guidance completely, and if other Fed presidents also speak less, it could increase volatility. The meetings would become more relevant, and trying to read the tea leaves of the bond market would become more important. Any forward guidance. So gez, I mean if you went to a point where he was talking a lot less, it's a huge adjustment for the markets. Um they've been used to a pretty steady update since um you know um Allan Greenspan's era which is the '9s. And so it's been a long time of this kind of rhetoric around what's going on, how the economy is going. I mean, if they couple it with the economic data flow that they share out to the markets in the world, I think it will calm some of the nerves and volatility, but if they just drop and get rid of forward guidance completely. Um, and it almost sounds like you want the other Fed presidents to not speak as much too. So, I don't know. It'll increase a lot of volatility and the meetings will be more relevant and trying to read the tea leaves of the bond market I think are going to be more and more important.

On the geopolitical front, signs of renewed agreements and commitments in the Middle East seem to have boosted optimism. Could this remove one of the biggest inflation risks currently facing the global economy have boosted optimism?  Um could this remove one of the biggest inflation risks that the global economy is currently facing?

Well, I think it is likely to be the case if they can do that, but I think they are still far away. If we look at what Iran wants and what the U.S. wants, I have not read anything showing that they are close together. The headlines may suggest progress, but coming into this, passage through the Strait was already relatively open. There are risks, such as vessels being boarded if they get too close to the Iranian border or issues with piracy in certain areas, but generally it was a fairly open and safe channel with free passage, no tariffs, and no cost to use it. Now Iran is saying they will open the Strait, but they do not really have the authority to do that because they do not control it. They are also suggesting that they control who comes in and that incoming vessels pay a duty. I do not see how the U.S. agrees to those terms. It would be a giant step backward and an inflation risk. So yes, if they can reach an agreement, that would help remove one of the biggest inflation risks in the world, but I still think we are a ways away from putting something lasting in place.

you know, if we look at what Iran wants and what the US wants, I mean, I haven't read anything that shows that they're close together. And,

you know, coming into, I mean, yes, the headlines say that for sure, but coming into this, it was pretty open. Like, you go in and out of the straight, nobody

cares. Yeah, there's some risks of I mean getting boarded if you get too close to the Iranian border or some

pirates in certain areas, but generally it was a pretty open safe channel. Free passage, no tariffs, no no cost to do

that. And now Iran says, "Okay, well, we'll open the straight." Well, they don't really have an authority to do that right now because they don't control it, but they say, "We'll open this the straight as long as we can control who comes in and out. Everyone that comes in and out has to pay a duty. I guess not out, in has to pay a duty.

Um I mean I don't know in on what planet the US agrees to that those terms. Um I suppose President Trump could agree to those terms, but it's a you know a giant step backwards and an inflation risk to your point. So yes, if they have an agreement that'll help and get rid of the biggest inflation risk in the world, but I still think we're a ways away from that, at least from a perspective of, you know, putting something lasting in place.

Yeah. Uh so my last question is, you know, about the markets. Um they continue to rally on the back of, you know, stronger than expected earnings.

Um has there been any standout results this season? And is this earnings growth alone enough to keep the rally going?

That's the big question.

Uh yeah, so definitely mixed earnings as as we came through here. We had the SpaceX we saw with their first um quarterly announcement. Market didn't like their AI spend so the stock got hit. I mean the stock's down about $30 $40 from its IPO level. Um Tesla as well had had weak earnings. Nvidia is still to report but uh Google and um Microsoft had good earnings and Meta and Amazon were a bit weaker. So I think it's interesting to see what that what's happening there. But some of these companies that we look at now are trading at 70 80 90 100 times earnings. like that's a pretty rich valuation. Um even if you stretch out and believe that the earnings are going to continue at this pace, I think it's um it's pretty stretched. So yeah, I mean I think what we've been doing is is trying to reduce risks and take advantage of these rallies and trim and look to reallocate.

I mean, if you bought US holdings and they've done quite well, you can actually re reallocate to US bonds at at reasonable rates where you can buy something that'll give you four or 5% and some protection from economic risk. So, so the long answer to your question is I I think that earnings were good, but likely not good enough. Um, and money supply I think is going to be an important thing to watch now. And if uh Walsh continues to talk on the hawkish side here, we're going to keep things tight, so on and so forth. I think that's another negative for the market.

So, we'll be interesting to see what he does and and how things change. And I I guess he probably doesn't want to talk as much because he's afraid that the market will well well he'll he'll be responsible for making the decisions and the outcome of the market and seems like that's not what he wants to do. Go, let's see the charts. All right. All right. So, we are into August. Were we in August last week? No, we were not.

So, first one in August. So, this is around 1:00 on Thursday, August 6. So, anything that happens between here and next week, we'll comment on then. Uh, let's jump right in here. So try to take a look at Canada primarily today. So this is a great chart from our economics team. Hiring won't prompt rate hikes anytime soon. So you know we've had lots lots of people ask about rates going up.

Rates going up in Canada. And one of the key drivers of that is obviously inflation. But another key piece is what's going on with the job market. And the job market is one of the worst, actually probably the worst job market outside of a recession that we've seen since 1990. Um, so I think it's important to take that into account. We only have net hiring of about uh 40,000 um uh year to date, which is super slow.

So unemployment is looking pretty high and the employment numbers are looking detain to deteriorate. So I think he's a key metric around what's going on in the Canadian economy and what's likely to happen in regards to rates just on the back of that. So near near-term hikes continue to fade in Canada but not in the US. And so the red line here would be the Bank of Canada.

And so this is for the calendar year. So where we started in January and then we had the fear that we're going to have this runaway inflation with the conflict in the Middle East. And then we've seen the Bank of Canada migrate back to effectively where we are today from a rate perspective where the US we've seen it continue to migrate higher with the view of potentially likely higher rates.

And so this is another reason to say Canada is unlikely to raise rates and if our economy continues to deteriorate, we might actually go the other way and cut rates. Nobody's talking about that right now, but certainly that's a possibility. on the US side. Well, they have higher oil prices, they have higher consumption prices. Some of that has to do with the tariffs. And again, Trump won't probably won't say that, but the US has been the most negatively impacted from the this tariff issue that we're seeing. So, the American consumer. So, we're seeing the possibility of raid heights start to creep up in in the US, which is extremely counter to what Worsh said he would do when he got into power. So, that'll be an important piece to continue to watch. So those are a couple of key risks to look at in uh Canada and the US. And so this is just more of a visual piece to it. And so we continue to always have questions around what's likely to happen to mortgages in Canada too. And this gives you a much better picture for that where we are here. So as I say, we continue to think that rates stay plus or minus where they are right now until the end of this year.

There's certainly lots of ground to cover between now and then. Assuming all else being equal, we do think there's a possibility rates go up in 2027, but we got a long way to go before that. So, that'd be something to to think about.

And then if you're looking at where we are today, this is the 2-year and the 5-year government of Canada bond. And these ones are effectively linked to mortgages. So, if you're buying a 5-year fixed mortgage mortgage, excuse me, you effectively look at these rates plus 2% and give you a good gauge. So we think that two-year actually comes down and we think the fiveyear is actually relatively flat um up until mid next year. So I'd be thinking about those things when I'm looking at it that way.

And then the last one would be the Canadian dollar. So what do we think happens here? We actually think Canadian dollar strengthens um over the next little while. So I think that's a key piece to take in when I'm making asset allocation decisions. But for people traveling to the US, that's also something to think about.

Um the last one is just stock related.

So this is a US. So S&P 500 sectoral earnings consensus. So I think there's a lot of numbers here. The key piece really is coupled with Eva's question off the top which is around can the tech companies continue to drive this rally and what we're seeing right now this is the waiting within the S&P 500. So what I've highlighted here is the information technology sector. So that would effectively be all the big tech names that everyone talks about all of the time. And so they're roughly 38%. This is extremely concentrated. And so as we look at one of those key risks, if we have a have a couple of misses from these tech companies, that's a risk to the overall market. And when if you look at some of these other key sectors, they can continue to be quite small on a current basis and a historic basis as well. And so this is I think something to think about stock concentration. What we've seen around the world, Korea had about 50% in two tech companies. And so the Korean exchange has been slammed over the past 2 3 weeks where it's down 5% last night. So the S&P is not as dramatic as that, but certainly much more concentrated in tech than it's ever been.

As always, the opinions expressed do not necessarily reflect those National Bank Financial. I have prepared the best of my judgment. Everyone's risk and level is different. If you have any questions about if any of these things are appropriate for you, please feel free to reach out to Eber or I and happy to discuss anything that we talked about today. Great. Thank you, Ben.

Uh so what's on the agenda for next week?

Um, so I think we're they're still looking towards what's going to go on with the earnings. So continue to watch earnings. Um, I think that would be generally the focus for now. August as I put out in a couple of the dailies this week so far. You know, August have had some choppy months. So hopefully we don't get uh anything material to uh to the downside this month because the volumes are lighter. I'd say the one thing that has perked up in the last little while is gold has got some attention back. Gold seems like it's picked up. It's had a couple of good uh days in the last week and a half. And the last piece which I think we talked about last week or the week before was just the US dollar yen. Um I continue to watch that. And so we had yen with a pretty big move in the last few days as you know. And so there's been talk about the US helping Japan. Why are they helping Japan? Well, um, Japan is the largest holder of US treasuries in the world. So, if they have to support their dollar, then they have to sell

treasuries. And so, that I think will be a key piece for the fundamentals of the markets at Canad. Uh, but generally quieter month so far. And so, we'll be watching see what else happens.

Yeah. Thank you, Ben. Thank you everyone. Remember to visit, subscribe, and follow us on YouTube and LinkedIn at hard investment group. The link to our daily financial heartbeats will be in the caption of the video and in your email box for our clients. As always, please reach out to me if you have any questions or if you would like to book a review meeting with Ben. Thank you once again for listening and enjoy the rest of your week. Bye.

Thanks everybody. Bye