The Loonie Hour Steve Saretsky

Turmoil in the UK as surging interest rates nearly collapsed the entire pension system. The Bank of England is now doing QE with double digit inflation. Pressure is mounting on the Fed but there is no imminent pivot. Canadian GDP remains flat despite record immigration growth, human stimulus is masking a recession.

National house prices in Canada have now endured their largest correction dating back to 2005. Meanwhile, the Fed hiked rates another 75bps and has made it clear it wants stocks and house prices lower. Currency markets are going crazy. Buckle up, things are about to get interesting.

Canadian household wealth fell by nearly one trillion last quarter with house prices dropping. More cheques are coming in the mail to fight inflation, and with that more rate hikes from the central banks too! Inflation is trending lower but remains sticky, and something markets will be paying close attention to.

The Bank of Canada, Australia and the Euro zone all raised interest rates this week. The US dollar continues to strengthen, placing stress on some of the worlds major currencies. We are only six months into this rate hiking cycle but already stresses are emerging in various corners of the market.

Twinkies are on the line, as the gents place their wagers for the Bank of Canada next week. A surprise miss on Q2 GDP in Canada suggests further weakness for Q3. No Fed pivot coming suggests more pain ahead as the bear market rally fades.

Canadian banks announced earnings and are increasing their loan loss provisions, but likely not enough considering the outlook for the nations housing market. The Canadian dollar continues to perform well thanks to the energy bull market. Europe is bracing for a deep recession and a full blown energy crisis.