A money manager at one of the world’s biggest investment firms says Canada is currently riskier than other parts of the world, and as a result his company’s funds are underweighting Canadian investments.
The Canadian economy is much riskier than many investors recognize, particularly with respect to excessive reliance on consumer spending, housing prices and household debt, David Wolf, portfolio manager in the global asset allocation group at Fidelity Investments and former advisor to the governor of the Bank of Canada, said in an interview with BNN Bloomberg on Monday.
“Those areas are starting to wobble,” he said, citing retail sales declining in inflation-adjusted terms by the largest amount since 2009 as well as a spike in consumer delinquencies and bankruptcies.
“There’s not much left to sustain us in the economy” considering weak business investment and export figures, Wolf said.
He sees particular risk in some of the country’s biggest sectors, such as financials. “Canadian banks really make their living off a healthy Canadian consumer,” he said.
Despite his warnings, he is not predicting a severe drop-off for the economy.
“I’m not saying we’re going to have a big recession, or that the consumer is going to have a big pullback,” he said. “But there is risk there that doesn’t exist in other markets, and that’s why we’re looking [elsewhere].”
He said while the timing is uncertain, the Canadian economy will eventually be hurt by its dependence on consumer spending, debt and rising real estate values.
“No one can predict exactly when you’re going to see the payback,” he said. “As fund managers we want to be prudent, we want to be diversified, we don’t want to take risks where we don’t have to, and that’s why we’re looking abroad.”
In a recent report, Wolf and his colleague David Tulk, a fellow portfolio manager at Fidelity, detailed the benefits for Canadian investors of “going abroad” in their fixed-income portfolios and equity holdings.
“Weaker global growth is likely to have a disproportionate toll on Canada’s small, open, commodity-producing economy,” they wrote.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
