Monday morning briefing: All eyes on inflation

March 15, 2021

One of Joe Biden’s first priorities as President was to pass a new, US$1.9 trillion stimulus package. After a few changes from the Senate and approval from the House of Representatives, the American Rescue Plan Act was signed into law on March 11. The plan includes an extension to unemployment benefits, making student loan-forgiveness tax free, maintaining the moratorium on evictions and foreclosures, as well as an expanded Child Tax Credit.

Economic/industry news

The BoC holds its key interest rate steady at 0.25%: Bank of Canada stands pat on stimulus, keeps up bond-buying

Canada’s unemployment rate declines to 8.2% in February: Economy blows past expectations, adds 259,000 jobs in February

The U.S. inflation rate was 1.7% year-over-year in February: U.S. consumer prices rise 0.4% in February, as expected

The ECB temporarily boosts its bond-buying efforts: ECB to boost emergency bond buys to stem yield rise

Monetary policy could tighten next year in response to inflationary pressure: RBC CEO sees inflationary pressure building as economy bounces back

The rotation from momentum to value stocks has been swift: The stocks rotation ride is real, and violent

Reasons for hope

The Pfizer vaccine is proving highly successful in Israeli study: Pfizer COVID vaccine blocks 94% of asymptomatic infections and 97% of symptomatic cases in Israeli study

U.S. looking to double its order of the J&J single-shot vaccine: Biden to order 100 million more J&J doses, boosting stockpile

Possible opportunities ahead for the restaurant industry: Restaurants face a great reset, thanks to COVID-19

Adapting your business

Tips to help you build your business: 11 useful tips for growing your business

Look no further than the landscaping business for guidance on proving your worth to HNW clients: An easy analogy to show your value to HNW prospects

Metric for proving the quality of a fund’s ESG investing required: How ESG are you, really?

Chart of the week: All eyes on inflation

The U.S. core inflation rate, which excludes food and energy prices, eased to 1.3% year-over-year in February (from 1.4% the previous month). This reduced some concerns about rising inflationary pressure. But is this also a signal of consumer prices rising at a slower pace in the months to come?

Recent manufacturing and services sector reports have shown significant gains in input costs, which will eventually make their way to consumers. Demand is expected to increase further in the U.S. as the majority of Americans receive direct payments as part of the new stimulus plan. Core inflation may have subsided in February, but it could pick up in the upcoming months. How fast inflation rises will impact the U.S. Federal Reserve Board’s decisions. Let us know what you think.
Used with permission of Bloomberg Finance L.P.

News and notes (U.S.)

The strategies hedge fund allocators are looking at: Demand for hedge funds is rising. These are the strategies investors like most.

SPACs are looking at tech firms, and it is concerning PE firms: Why PE firms targeting tech buyouts could face competition from SPACs

Understanding the impact of taxes on Social Security: 3 things advisors should know about Social Security and taxes

Fidelity launches new SMA offerings: Fidelity expands SMA lineup

Mutual fund sales and performance over the past two weeks: Mutual funds scorecard: March 9 edition

News and notes (Canada)

Mackenzie partners with Northleaf Capital Partners on new private credit fund: Mackenzie launches private credit fund

BMO launches new service for HNW clients: BMO’s adviceDirect launches premium service

Another Bitcoin ETF has come to market, this time from CI: Third Bitcoin ETF begins trading on TSX

Women are making up a greater proportion of board seats in Canada: Progress made in appointing women to boards: CSA

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