Economic Outlook

“The current rules close small bookstores, florists and lighting stores to in-store business but allow customers to line up at Costco and Walmart to buy these same items. If it is dangerous to buy a book at an independent bookseller, why isn’t it dangerous at Costco?”
~Dan Kelly, president, Canadian Federation of Independent Businesses

Warren Buffett Sold His Last 3 Canadian Stocks

In 2020, Warren Buffett has been lying low. Preferring to play his cards close to his chest, he hasn’t revealed much about what he’s been buying and selling. However, once every quarter, he is forced to reveal what he was up to in the quarter before. As it turns out, the “Oracle of Omaha” massively reduced his exposure to Canadian stocks this year.

In the second quarter, Warren Buffett sold out of Restaurant Brands International completely. That move was well publicized, leaving two Canadian stocks in his portfolio. He has trimmed both of those positions throughout the year as well. If this continues, Buffett may be out of Canadian stocks completely by the end of the year. That’s not a great sign for the Canadian economy but — as you’re about to see — there’s a silver lining. CLICK for complete article

The World Economic Forum in Davos, Switzerland is “where billionaires go to lecture millionaires how ordinary people live.”
James Delingpole, British writer, journalist

“It’s like people, including in the media (see New York Times) who call The Great Reset a conspiracy can’t read.”


Klaus Schwab is the founder of the World Economic Forum ~Ed

Is All The COVID Vaccine “Good News” Priced In?

In discussing yesterday’s market action, overnight Rabobank’s Head of Macro Strategy Elwin de Groot, writes that following the vaccine-inspired rally, “the market seems to have reached a delicate balance now where on the one hand, many investors are willing to long beyond the temporary resurgence of the virus as there is ‘light at the end of the tunnel’, whilst others remain concerned that the upcoming months could still prove rather challenging. This balance was well-illustrated by the performance in the S&P 500 yesterday, where the market opened lower, then regained almost fully the opening losses but then slipped again towards the end of the trading session. Yes, with the S&P only a whisker from its all-time high it is obviously ‘risk-on’, but somehow if feels different.

This point was on full display this morning when in the third consecutive good vaccine news released since Pfizer’s covid news last Monday, in which the company followed up with an increased effectiveness estimate (from 90% to 95%) which should make the company’s application for emergency US authorization be accepted smoothly, the stock response was lukewarm at best, with futures now having faded the entire post-update spike higher…CLICK for complete article

New Study Finds The Fed Put Is Very Real And Dates Back To The Mid-90s

For some of us, the idea of a Fed put hasn’t even been up for debate over the last several decades. We know it exists and, in fact, most of us believe it is the Fed’s main (and perhaps only) actual mandate: making sure markets only go up.

But that doesn’t mean the rest of the “straights” aren’t catching on a little late. And to them, we say better late than never.

And so now, a new study called “The Economics of the Fed Put” featured in Barron’s appears to show conclusively that the Fed put actually exists. The study’s authors, Anna Cleslak, a finance professor at Duke University’s Fuqua School of Business, and Annette Vissing-Jorgensen, a finance professor at the University of California, Berkeley’s Haas School of Business, found “compelling evidence” of the Fed put dating all the way back to the mid 1990’s.

For their research, the authors looked at “decades’ worth of minutes and transcripts of meetings of the Federal Open Market Committee, the stock market’s performance between those meetings, and the federal-funds rate.” CLICK for complete article