I'm Back (and Frightened)

I spent last week in the US (and aside from having terrible internet service) watched, with my jaw hanging open, the "reality TV" show that has become American Politics. 

What is scary is that nobody trusts anybody. The discussion surrounding both of the key candidates (at many levels) is "who lies the least?"

Here is what I heard (in anecdotal conversations): (accompanied by the expected shake of the head) "I just can't vote for Hillary, so I have no choice but to vote for Trump" or  "Obama got nothing done, we need change" and the standard: "Trump is nuts".

Whatever the outcome, what will leave a lasting mark on US society is the divisive nature of this campaign. Although it is not new, it is becoming more and more polarized to the extremes.

And this has to be a concern for the consumer who carried the US economy in Q2, because businesses are postponing decisions for growth (all of this evident in the Q2 GDP report).

As we have often suggested: uncertainty is the underlying force that has the potential to derail the global economy.

• UK manufacturing shrank the most in 3 years following the Brexit vote.
• Oil prices have dropped over 20% from their recent highs and closed yesterday below $40.
• The Canadian economy dropped 0.6% in May.
• Central banks are stuck, as all of their stimulus efforts have not had the desired effect.
• Global debt levels are at record high levels.
• European banks are failing their stress tests.
• 163 S&P 500 companies have reported Q2 earnings and while earnings "upside surprises" are above the average, the expected earnings growth rate is a negative 3.8%.

Folks...

Continue to "hope" for the best.

But prepare for the worst.

Today is webinar Tuesday for High Rock clients, where we will discuss all of these issues and more that impact our investing decisions on behalf of our and our client portfolios (because at High Rock, we invest our money in the exact same models as our clients).

We will post the recorded version at or about 5pm on our website: http://www.highrockcapital.ca/current-edition-of-the-weekly-webinar.html

Feel free to tune in.

Feedback, questions, concerns... email me:

scott@highrockcapital.ca

If you would like to receive this email directly to your inbox...

bianca@highrockcapital.ca