Image Source: We have not YET seen a recession in Canada or the U.S., at least from a “headline” GDP standpoint. But on a per-capita/ex-immigration basis, Canada is already there…and the U.S. may not be far behind. That’s what Dylan Smith, vice president and senior economist at Rosenberg Research, told me for this week’s MoneyShow MoneyMasters Podcast segment, recorded on-site at our recent Toronto conference.
In Dylan’s view, stimulus checks from the U.S. government padded consumer spending during and after the pandemic. But the savings Americans accumulated have now been “spent down” – leaving spending from high-end consumers as one of the only supports left for the economy. Meanwhile, “distortions” and “false assumptions” about the strength of the labor market are concerning…and investors “don’t appreciate how much slack is opening up for the economy.” In Dylan’s take, central banks in both the U.S. and Canada will continue to cut interest rates well into next year to combat emerging weaknesses. But it may come too late for North America’s twin economic powerhouses.
We then pivot to a discussion of what investors should do in response. Dylan reveals the one asset class he is a “perma-bull” on…which foreign markets look more attractive due to their undervaluation and secular growth outlook…and what to do if you’ve reaped big gains on tech stocks in a strong year for the Nasdaq. Video Length: 00:06:33Video Chapters
00:49 – Introduction to Dylan Smith of Rosenberg Research
01:12 – Concerns About the US Economic Outlook
01:31 – Labor Market Distortions and Inflation
02:11 – Canada’s Economic Challenges
03:10 – Fed vs Bank of Canada Policy Outlook
04:19 – Political and Fiscal Policy Impact
05:09 – Investment Strategies for Economic Protection
06:08 – Final Thoughts: Diversification TipsMore By This Author:Stocks Hit Fresh Records Despite Rising Rates. What Gives?RING: Digging Up Profits By Investing In Gold Mining SharesAmid Israel-Iran Fight, Where Will Oil Go Next?
Recession? Not YET; But…
