Tuesday morning briefing: Deferrals pushing down insolvencies

Equity markets have been somewhat volatile in recent weeks, with the main driver of this volatility the ongoing stimulus talks in the U.S. From discussions to halted negotiations to a piecemeal solution, and then back to a potentially full stimulus package, uncertainty has gripped investors. Among economists, the only certainty appears to be the necessity for further stimulus, which may help boost the world’s largest economy.

Last week, the U.S. Federal Reserve Board reiterated its belief that more stimulus is absolutely necessary to support the recovery. Meanwhile, initial jobless claims were higher than expected, signaling a slower recovery in the labour market. This may put more pressure on the government to put a spending package together, sooner rather than later. While investors monitor progress on a new package, financial markets could experience even more volatility.

Economic/industry news

Canada’s unemployment rate fell to 9.0% in September: Canadian job gains unexpectedly accelerate in September

The global recovery may be longer than expected: Global economy’s recovery from pandemic seen extending past 2021

More government support needed: Powell warns of weak U.S. recovery without enough government aid

Why everyone needs to consider liquidity risk: Have you thought about liquidity risk lately?

Looking to alternatives for diversification: What’s driving multi-asset funds into alternatives

The importance of staying invested: Nearly half of investors sold stock in March; most now regret it: Survey

A look at the performance of value stocks: Is value investing still relevant in a volatile market?

Reasons for hope

Canadian government purchases rapid antigen tests: First antigen rapid test for COVID-19 gets Canadian approval

WHO believes we could have a vaccine by the end of this year: WHO boss: ‘By end of this year, we may have a vaccine’

How pandemic helped this business grow: This company’s cooling chip became an essential tool during the coronavirus pandemic

Adapting your business  

How Pershing has responded to the pandemic: Pershing CEO: ‘Pandemic forced us to rethink everything’

Some helpful tips to beat Zoom fatigue: Beat Zoom fatigue with these 6 tips

The line between home and work life have blurred: Microsoft CEO says remote work can feel like ‘sleeping at work’

Chart of the week: Deferrals pushing down insolvencies

According to the Office of the Superintendent of Bankruptcy Canada, personal insolvencies, including bankruptcies and consumer proposals, were down 2.4% in August. Since the COVID-19 pandemic began, personal insolvencies have dropped markedly, largely in response to mortgage and other credit product deferrals, which have helped ease the burden on highly leveraged households.

With some government benefits scaled back, unemployment still high and deferrals ending, however, we might start to see a rise in personal insolvencies. In a speech last week, Bank of Canada governor Tiff Macklem indicated the central bank is closely monitoring household debt levels, particularly with historically low interest rates. Let us know what you think.
Used with permission of Bloomberg Finance L.P.

News and notes (U.S.) 

Not all hedge funds on board with potential new disclosure rules: Hedge funds skeptical of SEC plan to let firms conceal stocks

Reputation matters for activist investors: Peltz, Ackman, Icahn: How their ‘hostile’ reputations really work

The EU removes the Cayman Islands from its tax-haven blacklist: Hedge fund industry welcomes removal of Cayman from EU tax ‘blacklist’

Charles Schwab completes acquisition of TD Ameritrade: Schwab: $26B TD Ameritrade deal is done

News and notes (Canada)  

Franklin Templeton launches new ETF: Franklin Templeton launches growth ETF

Trade between Canada and China on the rise: Trade between Canada and China reaches record levels

Equity ETFs posted net outflows in September: Flows into ETFs cool to $1.1B in September

A look at why advisors aren’t including ETFs in their portfolios: Why aren’t advisors using ETFs in their portfolios?

For financial marketing and investment commentary help, contact us at 1.844.243.1830 or info@ext-marketing.com.