FidelityConnects

Today, we’re joined by Fidelity Portfolio Managers Sri Tella and Lee Ormiston to discuss the latest economic developments, and what the results mean for investors. Our focus today is on the Bank of Canada’s recent interest rate cut, inflation, and evolving fixed income strategies. Lee shares his thoughts on the higher-than-expected CPI, highlighting that Canadian inflation has a momentum that is rising faster than global trends. Meanwhile, Sri talks about the timing and pace of these cuts, advocating for a gradual approach to these rate reductions. Both then discuss the yield curve, and how they anticipate it to steepen in the short-term. Lee mentions that long term rates are currently fair, and he sees opportunities in the front end of the yield curve. Sri then addresses the current economic outlook, and future investment implications. He suggests that regardless of the current recession risk, there is a low probability for recession given the strong labour market and population growth. Lastly, the two discuss their fixed income positioning, emphasizing a focus on ten-year notes, and a cautious approach due to long-end yield curve inversion. They close off by stressing the importance of earning yield with controlled risk, while simultaneously adapting to economic and market changes.

Recorded on June 27th, 2024.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For a fourth year in a row, FidelityConnects by Fidelity Investments Canada was ranked #1 podcast by Canadian financial advisors in the 2024 Environics’ Advisor Digital Experience Study.

In this episode, we check in with Director of Quantitative Market Strategy Denise Chisholm for her bi-weekly sector watch and what recent data is telling us about the broader economy. Denise believes the markets have had a muted reaction to recent jobless claims cementing her theory that the market is experiencing a very soft-hard landing. But is this softening too quick? Hiring continues in the labour market, but the question is will this last? Denise believes month-by-month numbers are not predictive of what’s happening in the broader market. To really understand, she says you need to zoom out and focus on the year-on-year changes. The only true predictive factor to her is profits and earnings. And at this moment, it seems like companies have enough capital to keep people employed and on the payroll. She touches on how inflation dynamics are playing out very differently in terms of profits. Why are we having this bull market? How is this affecting the consumer sector? Denise says the deceleration in the market has been good for the stock market, but not good for purchasing power on the consumer. Individuals are finding it hard to dig out of rent increases, food inflation, and housing issues. She advises investors to be on the defense and offence. She sees strength in utilities, healthcare and consumer staples. And if you want to look into the offence, financials, real estate and industrials could be something to consider.

Recorded on June 27th 2024.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For a fourth year in a row, FidelityConnects by Fidelity Investments Canada was ranked #1 podcast by Canadian financial advisors in the 2024 Environics’ Advisor Digital Experience Study.

Today on the show special guest Jack Mintz joins us. Jack is an economist and President’s Fellow at the School of Public Policy at the University of Calgary. He discusses Canada’s economy, and challenges Canadians face in this current market environment plus he highlights the recent changes to capital gains taxes. Jack shares his thoughts on the capital gain inclusion rate, touching on both the individual and corporate levels. He points out the capital gains inclusion rate is increasing from one half to two thirds.  For individuals, there is a threshold of $250,000 where the 50% inclusion rate still applies. Most individuals won't be significantly impacted by this change, he says, but other taxpayers like corporations and trusts are affected from the first dollar. These new rules will come into effect on June 25th and the impact of these changes on the market is uncertain and will be observed over time. Jack also touches on the inflation story and how he does not see inflation dropping again any time soon, and that it’s going to take some time to get back to 2%. In terms of international investments, Jack believes that the current environment is a deterrent for foreign companies considering acquiring Canadian firms. He points out that Canada is struggling to attract investments, and how the country’s real per capita GDP has been declining for the last six quarters. Jack also addresses concerns about population growth, productivity output, and M&A synergy.

Recorded on June 25, 2024.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For the third year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2023 Environics’ Advisor Digital Experience Study.

In today’s episode, we are joined by portfolio manager Aneta Wynimko as she gives us an update on global consumer trends and where she is seeing opportunities in the consumer space. Aneta says the beauty space in Europe has grown a lot since the pandemic especially in the fragrance area. She also notes the fragrance niche is hitting the younger female generation as opposed to the older female age group. She comments how the European economy is much more different and slower than the US economy sparking tourism influx into Europe. She notes prices haven't gone up that much in Europe making things much more affordable which is why you’re seeing a massive migration of tourists coming on holiday to European countries. She also notes higher ticket discretionary items are suffering as she says people are hesitant to invest in big ticket items for fear of going into debt. Aneta says anything to do with home improvement is very sluggish. Auto sales like the EV sales trend has slowed down quite a bit. Aneta also comments on the demand of spirits, chocolates and weight loss drugs and the effects they have on the consumer space. 

 Recorded on June 21st, 2024.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For the third year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2023 Environics’ Advisor Digital Experience Study.

Hello, and welcome to FidelityConnects, A Fidelity Investments Canada Podcast. Connecting you to the world of investing, and helping you stay ahead. In today’s episode, we are once again joined by Director of Global Macro, Jurrien Timmer, to discuss key topics impacting the market in the second half of 2024. Jurrien looks at the current trends and suggests that we can expect a drama-free market. He notes that earnings growth is becoming more resilient, with positive momentum indicating a double-digit earnings growth for the latter half of the year. He highlights the significance of AI in driving economic growth. He explains that AI is one of the few factors that may generate sufficient economic growth to counteract the rapidly growing debt, and that productivity Is crucial for companies during this period to avoid falling into a debt trap. Jurrien then offers asset allocation advice, noting that bonds remain a competitive and viable asset class. He stresses the importance of diversification, suggesting that investors consider a broader range of options, including TIPS, commodities, and alternatives. As always, Jurrien shares his charts so please go to @TimmerFidelity on X (Formerly Twitter) to follow along.

Recorded on June 24th, 2024.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For the third year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2023 Environics’ Advisor Digital Experience Study.

Today we speak to co-managers of Fidelity Global Small Caps Opportunity fund Connor Gordon and Chris Maludzinski as they give an update on the fund, talk about their investing strategy, and where they are finding hidden gems in North America and globally. Chris points out the fund is 60 percent US-focused, but the other 40 percent is looking more attractive as valuations come down. Chris says being able to harness Fidelity’s global resources, visit management and go to trade shows is helping the team find attractive risk-reward opportunities. Connor adds that with global allocation they don’t take a top-down view and see it as an asset class, but rather an opportunity set. For example, mining equipment includes a lot of large caps in the US, but outside of the US, they are finding what they call “hidden global champions.” Chris adds that they believe volatility creates dislocation, and dislocation creates mispricing. They are putting the work in now so that they have a list of companies with price targets that they want to execute when the time comes. They go deeper into their selection of companies. Chris says they try to find dislocations, mispricings, and high-quality companies - which for them means companies that can grow earnings above market rates of return and have multiple arbitrage. Connor adds they look for situations where a quality company is mispriced because then we can have a differentiated view. Chris and Connor also discuss how AI fits in this mispricing story, how value and growth are interconnected, and how small caps are faring in this current high interest environment.

Recorded on June 20th, 2024.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For the third year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2023 Environics’ Advisor Digital Experience Study.

In today’s episode, we are joined by personal finance expert and author Robin Taub, who sheds light on how Canadian youth are navigating the current investing landscape.  She explores the importance of teaching young people about budgeting, finances, and investing from an early age, and how key barriers, such as a lack of financial literacy might be affecting them. Robin also dives into the impacts of inflation and how its affecting young Canadians. She also highlights the 5 pillars of money and what these mean for young investors, and later discusses how managing day-to-day expenses, especially rent, is a significant struggle for this group. Robin touches on the differences between how men and women save, how families are helping their children financially, and the broader benefits of financial literacy for Canadians.  

Recorded on June 19th, 2024.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For the third year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2023 Environics’ Advisor Digital Experience Study.

Portfolio Manager Ramona Persaud joins us today to discuss her current investment strategies, how valuation is currently being dispersed, and how international markets are performing. Ramona talks about the current performance of value and dispersion outside the US, particularly in continental Europe, the UK, and parts of Asia – and touches on the potential in more cyclical sectors such as tech. She highlights how there is increased value dispersion and alpha signal abroad. She explores how the Europe’s concerns regarding sustainable growth have shifted focus from the energy sector to one of defense and notes how her team in Europe is always swiftly adapting to these changes.  Despite market uncertainties, Ramona emphasizes how she continues to find compelling valuations in mid to large-cap sectors, and also talks about the importance of finding dispersion opportunities abroad.

Recorded on June 18th, 2024.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For the third year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2023 Environics’ Advisor Digital Experience Study.

With the Federal Reserve’s recent decision to hold rates amid cooling inflation, what does this mean for markets and the overall health of the ecomony in the US and in Canada? We sit down with portfolio manager and Fidelity Canada’s Chief Investment Officer, Andrew Marchese, to get his latest insights on the market landscape plus what potential opportunities there are for institutional investors. Andrew touches on this latest divergence in the market. The Fed has held rates and the Bank of Canada is relaxing. Andrew says he’s not surprised the path that interest rate policy is going at the moment. He says it’s important to evaluate profit and cash flow streams of companies into 2025. In terms of equity allocation, Andrew says we’re having an idiosyncratic year around stock selection. He’s always been pro-US in companies to invest in and he says it’s important to think long-term horizon. He adds he’s also paying close attention to utilities and commodities sectors. 

Recorded on June 13th, 2024.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For the third year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2023 Environics’ Advisor Digital Experience Study.

Today, we are joined by Head of Quant Index Solutions, Bobby Barnes, to discuss upcoming trends in the market, and important narratives in the investing sector. Bobby talks about the latest performance of utilities, such as how they’ve emerged as the third-best performing sector year-to-date, and the impact AI advancements will have on their future performance. He explores the economy from a macro level, and how current consumer trends and predictable CPI data has led to an increase in interest rates. He discusses the impact of increasing unemployment and how discretionary spending has changed since COVID-19. Bobby also looks at key drivers, such as how the U.S market’s focus on high tech and services has factored into bullish earning expectations. Lastly, he advises how to diversify during this late cycle, emphasizing why it’s important to focus on maintaining momentum and quality.

Recorded on June 14th, 2024.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For the third year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2023 Environics’ Advisor Digital Experience Study.