1. Canadian Inflation Numbers – As Expected
In July, inflation came in at 1.7% year-over-year, down from 1.9% in June.
For those looking for an interest rate cut, you can breathe a little. This report makes the case that a cut is coming—though not guaranteed. Mind you: Canadians continue to feel the pain from groceries and rent. Rent prices in July saw their first growth in a while
Don’t forget, this week is packed with Canadian economic data.
2. Everything Is Awesome?
A bunch of major banks—Goldman Sachs, Citi, UBS, and Wells Fargo—have raised their S&P 500 year-end targets.
Goldman Sachs raised its target to 6,600 from 6,100.
Why is everything awesome? Resilient earnings despite all the tariff-related noise and economy remain fine.
But here’s my take: whenever everyone is bullish, the last thing you want to do is get complacent. Can stocks go higher? Sure. But, can the stocks do the opposite? Yes, possible.
3. Commodities Check – Gold, Silver, and Oil
Copper broke lower on tariff noise. Palladium and platinum cooled off too. But, Silver continues to show resilience. Don’t ignore it.
Looking at the gold-to-silver ratio, silver still sits in the undervalued region.
Gold has now closed below its 50-day moving average for two straight sessions. The last two times this happened, a big rally followed. Watching closely. We’d need some catalyst for the rally, or else saying below this moving average for long could bring in sellers.
Oil remains a tough call. There’s de-risking and forces keeping prices low. The odds of oil hitting $100 by year-end? Very low right now. Remember: below $60 WTI, the next real floor is around $56.
4. Intel, VIX, and Housing
Intel is getting an investment from SoftBank. Next up, maybe the U.S. government? Remember: this wouldn’t be a bailout—it would be a “stake,” in the company.
Have you looked at the VIX lately? It’s sitting low, suggesting no fear in the market, even as clear risks exist.
On housing: U.S. home prices look like they’re rolling over. Home Depot missed earnings for the second straight quarter. Yet, homebuilder stocks like $TOL, $KBH, $LEN, $DHI, and $PHM have all recently crossed their 200-day moving averages. Strange divergence—definitely worth noting. Is the worst behind us already?
5. Investing 108 – The Return Illusion
Say you invested $100 in a stock:
- Year 1: it goes up 500%.
- Year 2: it drops 50%. You sell.
Here’s the math:
- Average return over 2 years: 225%.
- Arithmetic return: 200% total.
- CAGR: about 73% per year.
The lesson: move your stops higher as price rises. Otherwise, you risk giving up too much profit. At the end of the day, investing is more about management than chasing the next “10-bagger.”