Dear valued client,
Markets were turbulent this week and slid into negative territory amid concerns of a weak manufacturing activity report and valuations in the technology sector. Historically, the stock market tends to underperform in September, though it is uncertain how it will behave this year. While the Federal Reserve is expected to cut interest rates later this month, the market may have already factored this in. Additionally, the upcoming presidential election adds uncertainty and investor reactions are unpredictable.
The Bank of Canada reduced its key interest rate for the third consecutive time, lowering it to 4.25% in response to cooling inflation. Despite inflation nearing the Bank’s target of 2%, Governor Tiff Macklem emphasized that economic challenges remain, particularly with rising unemployment. While the rate cut may offer relief to Canadians with variable-rate mortgages, its broader impact on economic recovery is expected to take time, with calls for further reductions to stimulate growth.
In Canadian political news, the federal New Democratic Party (NDP) has officially ended its supply-and-confidence agreement with the Liberal government, citing disagreements over corporate greed and rising cost-of-living concerns. NDP Leader Jagmeet Singh announced the decision, accusing the Liberals of failing to address corporate interests and positioning his party as the only viable alternative to prevent a Conservative win in the next election. This move jeopardizes Prime Minister Justin Trudeau’s minority government, which could face a confidence vote and trigger a snap election. Conservative Leader Pierre Poilievre criticized Singh for not committing to an immediate non-confidence vote, calling the announcement a political stunt.
In tech news, Tesla plans to launch its Full Self-Driving (FSD) product in Europe and China next year, pending regulatory approval. Despite eight years of promises from CEO Elon Musk, fully autonomous self-driving technology has yet to be delivered. However, investor optimism remains strong, with Tesla’s stock rising nearly 5% following the announcement. This expansion could give more drivers the experience of being passengers in a self-driving vehicle as the company continues to push forward in the autonomous driving space.
“The greatest fear people have is that of being themselves. They do what everyone else does even if it doesn’t fit where and who they are. But you get nowhere that way; your energy is weak and no one pays attention to you. You’re running away from the one thing that you own – what makes you different. I lost that fear. And once I felt the power I had by showing the world I didn’t care about being like other people, I could never go back.” – 50 Cent
Have a terrific weekend,
PW
