We have not YET seen a recession in Canada or the U.S., at least from a “headline” GDP standpoint. But on a per-capita/ex-immigration basis, Canada is already there...and the U.S. may not be far behind. That’s what Dylan Smith, vice president and senior economist at Rosenberg Research, told me for this week’s MoneyShow MoneyMasters Podcast segment, recorded on-site at our recent Toronto conference.
In Dylan’s view, stimulus checks from the U.S. government padded consumer spending during and after the pandemic. But the savings Americans accumulated have now been “spent down” – leaving spending from high-end consumers as one of the only supports left for the economy. Meanwhile, “distortions” and “false assumptions” about the strength of the labor market are concerning...and investors “don’t appreciate how much slack is opening up for the economy.” In Dylan’s take, central banks in both the U.S. and Canada will continue to cut interest rates well into next year to combat emerging weakness. But it may come too late for North America’s twin economic powerhouses.
We then pivot to a discussion of what investors should do in response. Dylan reveals the one asset class he is a “perma-bull” on…which foreign markets look more attractive due to their undervaluation and secular growth outlook...and what to do if you’ve reaped big gains on tech stocks in a strong year for the Nasdaq. For more on-site insights from experts like Dylan, join us for the 2024 MoneyShow Orlando, scheduled for Oct. 17-19 at the Omni Orlando Resort at ChampionsGate. Click here to register: https://orlandomoneyshow.com/?scode=061246