Notes from Michael - June 15

Posted by Michael Campbell

on Thursday, 15 June 2017 18:30

Posted by Michael Campbell

on Thursday, 15 June 2017 

A warning“Have you noticed how many of our public debates are dominated by absolutists, by extremists who promote a black and white world that is totally incompatible with the complexity we deal with. The transformation is amazing. If you are not one of these people, you have to push back. Otherwise you are going to wake up and find things so dramatically changed in society and maybe in ways you don’t like. One more thing, they’re coming after your money. The more successful you are, the more hours you spend working, the more in demand skills you have, those same people want your money and they’ll take to an extreme.”
John Johnston, Chief Strategist of Davis Rea says the common thread running through markets right now is that the nice orderly World has come to an end, we are fracturing and there is increasing political risk in each economy. People are angry, they’re restless and they have and will continue to make "outside the box” choices which is increasing uncertainty. 
Johnston also has a unique take on the backing away from free trade. He says the increased bureaucracy and mountains of paperwork will be more damaging than the tariffs themselves in damaging the global economy,
With the rise in equities, Johnston advises this is the time to re- balance your portfolio.
After forecasting the drop from $1.01 to .70 cents in the Canadian Dollar at the Money Talks conference in 2013, Johnston continues to believe that the long term the Canadian is going down further, but currently he expects a rally in the currency to 76-78 cent range by year end. 
Johnston does not believe mortgage rates are going higher near term.
Bottom Line: The bias is towards weakness in the Stock Market short term. 
Careful What You Wish For: Ozzie notes that the first Toronto housing numbers are in since the Wynn government put in its 16 point plan, that real estate offices are flooded with listings. The money is still there though, has moved to another big city with Montreal now booming, as are smaller centers like Kelowna in the Okanagan. 
Victor has just gone long the US Dollar and is currently not bearish the Canadian Dollar. 

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