Financial News for the Week of July 8th, 2022
Financial News Highlights
- Recession calls increased this week, but the job market begged to differ. The U.S. added 372k jobs in June, keeping the unemployment rate at its historic low of 3.6% and amplifying fears about inflation.
- In contrast, leading business indicators slipped modestly in June, while remaining above the 50 threshold, which suggests that both manufacturing and services sectors continue to expand.
- The FOMC minutes from the June meeting showed significant worries about the possibility that high inflation is becoming entrenched in consumer expectations. The Fed is positioned for another supersized rate hike at the end of the month.
U.S.-Job Gains Defy Recession Calls
Recession became a much more popular word on the street this week in financial news. Revisions to first quarter GDP data and a weak spending report for May which came out at the end of last week revealed much softer consumer momentum in the first half of the year. This led many forecasters to downgrade their outlooks, with some calling for recession. TD Economics is not calling for a recession, but we acknowledge the downside risks have risen. As such, we have formulated an alternate economic profile on how a U.S. recession might unfold.
The Atlanta Fed’s GDP Nowcast is pointing to a second quarter of contraction in GDP in Q2 (Chart 1). However, two quarters of contraction in GDP is not enough to qualify as a recession according to NBER criteria – the economic body that defines recessions. In addition to economic output, it places a heavy importance on payrolls employment and real personal incomes less transfers. The income measure has certainly softened with high inflation in recent months but remains in expansionary territory. And the impressive June payrolls report confirmed that employment remained strong (Chart 2). The unemployment rate remained low at 3.6%, and average hourly wages were up a healthy 5.1% year-on-year, both pointing to tight labor market conditions.
Putting aside healthy hiring through June, sentiment indicators are showing some softness. The Institute for Supply Managements’ (ISM) readings for the manufacturing and services sectors both slipped modestly. However, both sectors remained above the 50 threshold, which suggests that both remained in expansionary territory. The underlying details paint a slightly more nuanced picture. Both sectors showed an increase in current business activity, but in the manufacturing sector, the new orders index slipped into contractionary territory, while in the services sector it eased but remained solidly expansionary.
Another important message of the ISM reports is that prices paid by businesses continue to ease – a trend that corresponds with a recent reduction in supply chain bottlenecks. Indeed, the supplier delivery times have improved since the beginning of the year, especially in the manufacturing sector. According to the San Francisco Fed’s research, the distribution of price gains as measured by core PCE inflation is equally split between supply and demand factors, suggesting that cooling on the supply side should help ease inflation going forward.
In the meantime, minutes from the FOMC meeting in June showed that members are worried about the level of stickiness in price gains, and the rising possibility that high inflation is becoming entrenched in consumers expectations. This fear clearly overshadowed any concern the members might have had about prospects for economic growth, resulting in a rare consensus when deciding to supersize the rate hike to 75 basis points. The Fed is positioned for another supersized rate hike at the end of the month, as it focuses on tempering demand.
Maria Solovieva, CFA, Economist | 416-380-1195
This Financial News report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this financial news report has been drawn from sources believed to be reliable but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.
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Financial News for the Week of July 1st, 2022
Financial News Highlights
- Real personal consumption expenditures contracted in May, as consumers continue to tap excess savings.
- Indeed, in another sign that demand may be softening, core PCE inflation (that excludes food and energy) declined again to +4.7% year-over-year (y/y). Headline inflation (+6.4% y/y) continues to be supported by rising food and energy costs.
- The coming year will certainly pose economic challenges for emerging markets. However, there is still ample slack to be made up after the past two pandemic years that will provide a fillip to growth for many countries.
- Three shocks are the main drivers of the lower outlook for EMs: the spring lockdowns in China, the war in Ukraine, and the sanctions on the Russian economy.
U.S. -Consumers Cut Back As Prices at the Pump Surge
Cracks are starting to show in the U.S. economy in financial news. First quarter growth disappointed as the economy contracted for the three months to March. Despite the negative print, there was still reason to be optimistic given resilient consumer demand. Unfortunately, this fillip to growth is quickly fading.
The final release of the first quarter data this week showed that consumer spending was much weaker than realized at first blush. Personal consumption expenditures rose 1.8% (at a seasonally adjusted annual rate) in the first quarter, notably less than the 3.1% expansion reported in the prior release. Consumer services spending was notably weaker, having been marked down by 1.8 percentage points to 3.0%. Durables spending also registered a more tepid expansion of 5.9% relative to the 6.8% previously reported.
Most have expected that goods demand was set to lag as the economy reopened and people were able to travel, go out, and engage with the services sector. So, what is particularly worrisome about the report is the tepid growth in services demand. Indeed, May’s personal income and spending report looks like it reflects an extension of this trend. On a nominal basis spending registered + 0.2% month-over-month (m/m) but, with inflation at multi-decade highs, after price effects were stripped out the real consumption expenditures contracted 0.4% for the month. Worryingly, April’s growth was revised downward to 0.3% m/m from 0.7% prior.
Ultimately this is coming about as the anticipated growth in services spending is not materializing to the extent required to offset the slowdown in goods spending (Chart 1). In May, real services expenditures grew by 0.3% (m/m) but were nowhere near enough to offset the 1.6% m/m contraction in goods purchases in financial news.
Indeed, in another sign that demand may be softening, core PCE inflation (that excludes food and energy) declined again to +4.7% year-over-year (y/y), after peaking at 5.3% in February. Unfortunately, headline inflation (6.4%) picked up and was underpinned by surging food prices and energy goods and services prices, which were up 11.0% and 35.8 % year-over-year respectively. The ongoing surge in the cost-of-living may already be forcing households to make tough choices on what to buy and what to forego, or at least rethink some discretionary purchases.
Going forward, the concern is that consumer sentiment continues to fall as inflation and rising interest rates dent disposable incomes and talk of recession raises anxieties. In June, the Conference Board’s measure of consumer confidence reached its lowest level since February 2021. The main culprit being the sustained decline in consumer expectations (Chart 2).
Households are facing a historic cost-of-living crunch. Moreover, given the broader context of high inflation, sagging consumer confidence, and a Fed that remains steadfast in tightening monetary conditions until inflation abates, consumer spending faces a slew of headwinds in the coming months.
Andrew Hencic, Senior Economist | 416-944-5307
Global- Emerging Market Outlook Dims
The skyrocketing food prices and interest rate hikes in advanced economies have raised bad memories of past stumbling blocks for emerging market (EM) economies. The coming year will certainly pose economic challenges, but there is still ample slack to be made up after the past two pandemic years that will provide a fillip to growth for many countries.
We have highlighted the risks to the outlook in our recent Quarterly Economic Forecast (link) and Question and Answer (link) publications. Broadly speaking, tighter financial conditions, slowing growth in advanced economies, the knock-on effects from the war in Ukraine, and China's commitment to Zero-COVID will all weigh on demand. Our outlook for emerging markets has been marked down to 3.2% in 2022 (from over 4% in our March outlook).
Three shocks are the main drivers of the lower outlook for EMs: the spring lockdowns in China, the war in Ukraine, and the sanctions on the Russian economy (Chart 1). Beyond that, the global economic landscape is shifting as growth in advanced economies slows – with anticipated knock-on effects for the rest of the world.
The war in Ukraine has kicked off another surge higher in energy prices. For most, higher energy prices act as a tax on households, eroding disposable incomes. Moreover, rising prices of key commodities (accompanied by the recent surge in the U.S. dollar) materially raise input costs for firms in import reliant markets.
Food expenditures also make up a much larger share of the household expenditure basket in less developed nations than in advanced economies (Chart 2). Higher food prices will be reflected in more severe inflation, that indicates a rapid erosion in living standards and leaves less money available to purchase other goods and services.
The increasingly downbeat outlook for China and the U.S. will bleed into total global demand. The two countries accounted for 13.9% and 8.5% of global merchandise imports, respectively, in 2019 and any slowdown in activity will trickle down through supply chains.
Financial conditions have also tightened as monetary authorities have been raising interest rates since 2021, in an effort to combat domestic inflation and stave off capital flight. As higher costs of capital feed through to the economy, the challenging conditions will leave vulnerable firms looking to secure liquidity.
Despite the landscape for emerging markets growing increasingly challenging in 2022 there is room for optimism as services spending resumes. Thailand, for example, saw tourist arrivals plummet from nearly four million in December 2019 to 520 thousand in May 2022. Moreover, if advanced economies execute a soft landing, the risks associated with a rapid tightening of financial conditions can be avoided.
Andrew Hencic, Senior Economist | 416-944-5307
This Financial News report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this financial news report has been drawn from sources believed to be reliable but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.
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Featured Article: To Find the Wines of Summer, Just Say Quaffable
Featured Article: To Find the Wines of Summer, Just Say Quaffable
Terms like ‘refreshing,’ ‘easy drinking,’ ‘crisp’ and ‘light’ have all been offered as synonyms. Our wine columnist dove deep into the category and came up with 5 categorically quaffable wines (also great values) to drink right now.
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What does “quaffable” mean? When I went in search of a quaffable wine recently at Bogey’s Bottled Goods in Southold, N.Y., partner Zach Glassman met my request with a raised eyebrow. “ ‘Quaffing’ is such a fun word,” he said. “You don’t often hear such eloquence on Long Island!”
As a one-time resident of Long Island, I took the tiniest umbrage at Mr. Glassman’s response, but I understood what he meant. I love the words quaffing and quaffable. They are fun and capture the character of summer; to me, a quaffer is a wine that does the same. But while I’ve always found these to be useful descriptors, not everyone seems to agree. Often, retailers will translate “quaffable” to terms like “easy drinking” and “refreshing.”
Danny Roosevelt, head of purchasing at Parcelle Wine in New York City, told me he doesn’t consider “quaffer” a “customer-facing word.” In his view, it isn’t “universally meaningful.” Mr. Roosevelt might recommend a “light, refreshing red” or “crisp, salty white,” both of which he considers synonymous with quaffer.
He sent me his list of quaffing wines, red and white, from all over the world. One of his favorites is one of mine too: the 2020 Tiberio Trebbiano d’Abruzzo ($16). I already had a couple bottles at home, and I brought one to dinner at Divina Ristorante, my friend Mario Carlino’s (BYO) restaurant in Caldwell, N.J. “Quaffable?” Mario repeated when I described the wine. The native of Calabria, Italy, shook his head. I poured Mario a glass. He liked the wine but had his own words to describe it. “This is vinello leggero,” he said. Translation: light wine. It meant he considered the wine pleasantly drinkable, if somewhat cheap.
When I emailed Jason Jacobeit, co-proprietor of Somm Cellars in New York, to ask for his picks, he suggested a couple of village Chablis that “went down easy” and were “vividly fresh.” Two of his favorite producers, Charlène Pinson and Bernard Defaix, were priced a bit higher ($30 and $36, respectively) than my own favorite quaffing Chablis: the 2020 Gilbert Picq & ses Fils Chablis ($20), a fresh, lively and eminently drinkable wine from a producer who is also quite good, if somewhat underrated.
While Mr. Jacobeit’s fiscal sweet spot for quaffers was a bit higher than mine, Donna Garvey’s was more closely aligned. Ms. Garvey, a salesperson at Gary’s Wine & Marketplace in Wayne, N.J., does use the q-word when talking to customers, and she believes a quaffable wine shouldn’t cost more than $15. It should also be “universally likable” and taste good with or without food, in her view. I bought a couple of Ms. Garvey’s favorites and particularly liked her pick of the Gruet Brut Rosé ($15), a sparkling wine from New Mexico made mostly from Pinot Noir. A red berry-fruited Champagne-method wine, it’s a slightly frothy, just-dry-enough pink sparkler that is indeed suitable for drinking alone or pairing with food.
While the Gruet has broad distribution, some other $15 quaffers I tasted are a bit harder to find—but worth it. The 2021 Alkoomi Rosé ($12), from the Frankland River region in Western Australia, was dry yet wonderfully juicy. The 2020 Domaine de la Rosière Jongieux Blanc ($15), a white wine made in the Alpine Savoy region of France from the Jacquère grape, was pure mountain crispness.
While $15 is about as low as I typically go with a quaffer, Mr. Glassman at Bogey’s suggested an even cheaper wine: the 2021 Thresher Sauvignon Blanc ($10), from Chile. Marked by a pleasing sweet-tart flavor, it was mouthwateringly crisp and happily devoid of the herbaceous green notes that sometimes mar a cheap Sauvignon. It was so light-bodied it was better as an aperitif than as a food wine.
My friend Sue liked the Thresher Sauvignon Blanc for this very reason. “It’s a lot like water,” she said (something the Thresher winemaking team might not like to hear). She had her reservations about the word quaffer, however. “It sounds very King Henry the 8th,” said Sue, who is English herself and happened to be spot-on historically. An online etymology source I consulted said “quaff” dates back to the 16th century and originally meant “to drink or swallow in large draughts.”
Sue and I didn’t drink large draughts of any one quaffer, but we did try several, including reds from countries around the world. I don’t often think of red wines as quaffers—save, perhaps, for Lambrusco. The Lini 910 Labrusca Lambrusco Rosso ($18) from Emilia-Romagna is one of my summertime go-tos. Low in alcohol (11%), fruity but dry, it’s fizzy enough to be refreshing and substantial enough for food. I love it with barbecue.
A good quaffing wine isn’t the cheapest wine but rather a modest wine, well-made, from a good producer.
A couple of the reds recommended to me were a bit too much in terms of alcohol or tannins or oak to qualify as quaffable in my book. They just didn’t go down easily enough. A couple that did were produced from fairly obscure grapes. The soft and fruity 2020 Las Liebres Colonia Bonarda ($15) from Mendoza, Argentina, is made from the Bonarda grape (Mendoza’s other red grape besides Malbec). The 2020 Les Athlètes du Vin Grolleau ($20), a Loire Valley red made from the Grolleau grape, didn’t look much like a quaffer. The deep purple color suggested something tannic. But on the palate the wine was juicy and bright, and there was just a touch of earthiness behind the red-cherry fruit. And it was also low in alcohol (12.5%).
Another quaffing favorite came from the Rheinhessen region of Germany and the talented winemaker Florian Fauth. The 2020 Seehof Weissburgunder Trocken ($25), his most “basic” dry Pinot Blanc, is a wonderfully snappy white with an intense, even tangy mineral edge.
In the end, a fairly wide range of wines in our tasting qualified as what I’d define as quaffable. So how might you identify one when ordering in a restaurant? My friend Alan had an interesting answer. “They’re not at the bottom of the wine list,” he said. “They’re the next level up.”
That’s exactly it. A good quaffing wine isn’t the cheapest wine but rather a modest wine, well-made, from a good producer. Alan elaborated, and I couldn’t have said it better: “A quaffing wine is one you don’t really talk about, but you smile while you drink it.”
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Financial News for the Week of June 24, 2022
Financial News Highlights
- Existing home sales fell 3.4% in May, extending the losing streak to four months. The months’ supply of inventory recorded an uptick, rising to 2.6. This was up from 2.2 months in April and 2.5 months in May of last year.
- New single-family home sales rose 10.7% in May but are still down 17% from the recent cyclical peak in December 2021.
- With little else on the data front, attention focused on Fed Chair Powell’s testimony in Congress. Powell characterized the Fed’s inflation fight as “unconditional”. Pressed on the likelihood of a recession, Powell reiterated that this was not the intended outcome, but that it was “certainly a possibility”.
U.S. -Changing Seasons
Fresh economic data was limited this short week, with financial markets closed on Monday for Juneteenth in financial news. Attention was focused on Powell’s testimony where he notably acknowledged the risk of recession, sending longer-term bond yields lower. So while summer may have officially kicked off this week, the economy may be a bit ahead of the curve, with the backdrop already featuring some falling leaves.
We did get an update on how the housing market was faring in the face of higher rates as of May. Existing home sales fell by 3.4%, stretching the string of declines to four months. After a solid ride during the pandemic, activity has fallen back to 2019 levels (Chart 1). With sales falling and inventories recording a small uptick, the months’ supply of inventory at the current sales rate has been edging higher. We’re not in balanced market territory yet, but the trend is slowly tilting toward it (Chart 2). Sales in the much smaller and more volatile new single-family home market regained some ground in May, but are still down 17% from their cyclical peak at the end of 2021. Led by gains in the South, new single-family housing inventory is piling up, rising to 444 thousand – the highest level outside of the 2005-06 housing boom period. This has brought this smaller segment of the housing market well into buyer’s territory (Chart 2).
The slump in housing demand is in large part a response to deteriorating affordability from the sharp increase in interest rates. Thirty-year mortgage rates are already near 6% – almost double their level at the start of the year, and a level not seen since 2008. The Fed is focused on bringing inflation down from its 40-year high with aggressive interest rate hikes. So it is unlikely that we’ll see any respite on the rates side anytime soon. As a result, we expect home sales to trend lower in the quarters ahead, while prices also likely to give back some of the recent gains starting later this year. A tight inventory backdrop will help limit some of the downside. Our latest home price forecast for East Coast States can be found here.
Fed Chair Powell testified before Congress this week and shared a similar view of the housing market: “Rate rises should impact house prices fairly quickly”. Powell’s testimony reconfirmed the Fed’s resolve to tackle inflation, calling the inflation fight “unconditional”. When pressed on the likelihood of a recession, Powell reiterated that this was not the intended outcome, but that it was “certainly a possibility”.
Recent Fed reports (see here and here) confirm that recession odds in the 1-2 years ahead have increased. What’s more, the Atlanta Fed’s GDP tracker (not an official forecast) points to 0% growth for a second quarter of this year, which would imply that that we may already be close to a technical recession. Our latest forecast also expects a sharp deceleration in economic activity and a modest increase in the unemployment rate in the year ahead, but it still points to decent growth of a little over 2% this year and 1.4% next. Still, there is indeed a very ‘Thin Margin for Error’. Whatever the outcome, autumn or a mild winter, one thing is for sure, the economy’s hot summer days have already passed.
Admir Kolaj, Economist | 416-944-6318
This Financial News report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this financial news report has been drawn from sources believed to be reliable but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.
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Featured Article: 9 Under-the-Radar Vacation Spots in Europe
Where to beat inflation and crowds in Europe this summer? Here, 9 travel alternatives to the usual hot spots in Italy, France and Spain
So you missed your chance to travel too Venice, Paris and Barcelona without the crowds in the immediate aftermath of the pandemic’s early waves. Fret not. Here are nine alternative locales that promise to be relatively serene this summer even though tourism to Italy, France and Spain is expected to reach or exceed pre-Covid levels. And while inflation is also surging in Europe, the dollar is hovering near a five-year high against the euro, which means U.S. currency has more relative buying power in the Continent than in recent years. Steer off the Jet Set trail and toward one of these under-hyped spots and you’ll find serious bargains.
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ITALY
The village of Comacchio in northern Italy’s Ferrara province.PHOTO: ALAMY
1. Ferrara: Renaissance art and ravioli
Three centuries of rule by the enlightened D’Este family left this city, tucked in the plains between Venice and Bologna, with an intriguing Renaissance legacy. To stroll through Ferrara is to step back in time. A good place to start is Trento e Trieste square, the city’s heart and home to Ferrara’s cathedral. From here it is a short walk to the city’s other highlights: the 14th-century Estense Castle, the Renaissance Palazzo dei Diamanti and the Via delle Volte, a winding, cobblestone alley that passes under vaults connecting buildings on each side. Don’t leave without trying Cappellacci di zucca (pumpkin-filled ravioli), a regional specialty. A 45-minute drive leads to Comacchio, a village with a network of canals much smaller but no less picturesque than Venice’s.
Italy’s Gran Sasso and Monti della Laga National Park in the Apennine Mountains, Abruzzo.The Canal du Midi in the Languedoc-Roussillon region of France, near the Spanish border.PHOTO: ALAMY
2. Gran Sasso and Monti della Laga National Park: Mountain pursuits
When “Italy” and “mountains” are used in the same sentence, the jagged Dolomites and the rest of the Alps tend to come to mind. But there are also the Apennines, which extend down the Italian peninsula for more than 700 miles, dividing the country in two. This national park just east of Rome is the ideal spot to explore Italy’s “other” mountains. A simple route to become one with nature here is to paddle a canoe down the Tirino River, reputedly Italy’s cleanest waterway. A cooperative called Il Bosso near the small town of Capestrano provides canoes and guides (reservations required). Travel to take your choice of nearby hikes: One leads to the top of the 9,550-foot Corno Grande, the highest peak in the continental Apennines.
On Marettimo, a small island off the coast of Sicily, one of the key pastimes is boating around grottoes.PHOTO: GETTY IMAGES
3. Marettimo: Secluded coves, translucent water
Hop on the hydrofoil in Trapani on Sicily and you’ll reach the island of Marettimo in just over an hour. At about 2 miles long and 3 miles wide, Marettimo offers salt-water-minded visitors limited options, most of which require a bathing suit. You’ll find no large beaches, but for a fee, locals will whisk you to one of the many secluded coves that can only be accessed by boat. Pastimes are simple: Snorkeling, scuba diving and boating around grottoes with translucent turquoise water. Or you can follow one of the many hiking trails in the island’s rocky, rugged interior.
FRANCE
Ile de Sein, among the most scenic of Brittany’s islands.PHOTO: ALAMY
1. The Brittany Coast: Elemental islands
The islands off Brittany’s shores in northwest France are hardly a secret, but they are plentiful and well spread out, which means that, even in July and August, visitors can avoid the summer crush (most of the time). Among the most scenic is petite Ile de Sein, travel only about 5 miles from the mainland. If you want to feel like you’ve reached Europe’s very edge, look no further. Another good choice is Saint-Malo, with its citadel and beaches that come and go with the tides. It’s considered a must-see, but the crowds can get intense (though not at the level of nearby Mont-Saint-Michel, farther up the coast in Normandy)
The Canal du Midi in the Languedoc-Roussillon region of France, near the Spanish border.PHOTO: ALAMY
2. Canal du Midi: Float around medieval villages
You can travel via barge down many canals in France, but this one in the southwest near the Spanish border is among the most picturesque. Along the way, you can stop to tour vineyards, bike along the path flanking the canal or visit medieval villages, prime among them the fortified town of Carcassonne. No license is required to pilot most of the barges. Or you can reserve a spot on a chartered barge with a captain, which removes some of the romance of floating freely down a 17th-century canal, but makes up for that with amenities.
Porte de Paris in the historic core of Lille. Ten miles from the border of northern Belgium, the city blends French and Flemish cultures.PHOTO: ALAMY
3. Lille: Beer and antiques
Blending French and Flemish cultures, this former industrial city, travel about 10 miles from the border of northern Belgium exudes a vibe you won’t find elsewhere in France. The colorful facades on many buildings in the city’s historic core will make you think you’ve crossed the border, as will one of Lille’s signature dishes—the distinctly Belgium classic moules-frites (steamed mussels and french fries). Beer and waffles also play a starring role, another reminder you could easily zip up to Belgium. The crowd-averse will want to ensure they leave Lille before the first weekend of September when the city is overwhelmed by the hordes arriving for the braderie,said to be the largest annual flea market in Europe. More social sorts will want to linger and be swept up in the pulsating energy surrounding the innumerable stalls, selling everything from vintage doorknobs to silverware dating back to the French Revolution.
SPAIN
Spain’s Cuenca, a 90-minute drive east of Madrid, seems to cling to the side of a steep rock face.PHOTO: ALAMY
1. Cuenca: Moorish relics, abstract art
This city, a 90-minute drive east of Madrid, offers a window onto Spain’s past that many foreigners miss, despite the vicinity to the capital. From a distance, Cuenca’s buildings, seemingly hanging precariously to the side of a steep rock face, recall Medieval towns in central and southern Italy. But as you get closer you see the added Spanish touches, including the Moorish architecture that mixes European and North African. A walk across the Saint Paul Bridge, which spans the gorge, will give you an appreciation for the prowess of the architects and engineers who built this town centuries ago. One of the best places to observe the bridge is from the nearby Spanish Museum of Abstract Art, which has works from the second half of the 20th Century. An excellent travel destination for the family!
Galicia’s Playa de las Catedrales (Beach of the Cathedrals).PHOTO: GETTY IMAGES
2. Galicia: Wild beaches, great gardens
This region in northwest Spain is famous for its capital city, Santiago de Compostela, the arrival point of the Camino de Santiago, an ancient pilgrim route that covers 500 miles between it and the French border. Lesser known is Galicia’s varied coastline, marked by rock formations that plunge into the sea and secluded beaches that lend themselves to long walks. Playa de las Catedrales is among the most popular spots on the coast thanks to the rock formations that inspired the name. Come at low tide to pass under the natural stone arches on the beach or high tide to watch from above as the waves crash against the rocks. A perfect travel location!
The fortified town of Girona, one of the filming locations for HBO’s ‘Game of Thrones.’PHOTO: ALAMY
3. Girona: Ancient architecture, seaside glamour
A 40-minute train ride from Barcelona, Girona is a walled medieval town covered in cobblestone streets and so eerily atmospheric that it was used as a set in the HBO series “Game of Thrones.” You’ll want to spend a day or two just wandering slowly by foot. Among the chief highlights is the Jewish quarter, one of the best-preserved in Europe, with restored buildings, narrow alleyways and arches dating to before 1492 when the Spanish monarchs expelled the Jews from the country. Girona also makes a good base for exploring the region since it’s just 45 minutes or less by car from beach resorts on the Costa Brava and less than an hour from the French border.
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Financial News for the Week of June 10, 2022
Financial News Highlights
- U.S. CPI came in above expectations, with the headline reading reaching a new 40-year high. Core inflation also surprised with a broad-based acceleration.
- The U.S. trade deficit narrowed in April with both lower U.S. imports and rising exports contributing. We expect further narrowing will add to GDP growth in the second quarter.
- Meanwhile, consumer credit made bad headlines this week, but as long as household income stays on the rise, credit growth should remain sustainable.
U.S. - The Good, the Bad and the Ugly
Market anticipation built through the week for Friday’s CPI data release. Inflation came in above expectations and markets reacted by ratcheting up their expectations for rate hikes. Financial markets have now priced in three consecutive 50 basis-point hikes, starting with next Wednesday’s FOMC decision. The 10-Year Treasury yield jumped seven basis points on the news, finishing the week 18 basis points higher at 3.11% (at the time of writing). Equity markets’ timid attempts to regain their footing early in the week came crashing down Friday, as Thursday’s sell-off intensified.
Indeed, “ugly” seems like an appropriate epithet for May’s CPI print. Energy prices pushed the headline print to a new 40-year high. Since May, the nationwide average retail gasoline price has continued to rise and is likely to reach $5 per gallon in the coming days. This will keep the headline reading elevated in June. Food prices also continued to accelerate, adding to the headline print.
Excluding energy and food, May’s month-on-month core inflation matched the April’s reading. What came as a surprise was an acceleration in core goods inflation. In turn, core services inflation, which tends to be stickier and less volatile, decelerated only slightly remaining above last year’s average (Chart 1). This suggest that core inflation – the main yardstick for monetary policy– is not coming down to a level the Fed would like it to be at any time soon. What’s needed is a further easing in demand, particularly for goods, to lower price pressures. Since some retailers are starting to discount their merchandise in the wake of excessive inventories, we expect pressures there to ease in the coming months.
Some good news came from trade data. The U.S. trade deficit narrowed in April to $87.1 from a record of $107.7 billion in March. Over the past two years demand for imported goods outweighed the value of American exports, contributing to a significant wedge in the trade balance, but this week’s report delivered a snapback, providing some evidence of declining demand for imported items. Meanwhile, exports of goods and services expanded. Trade data is quite volatile and it’s possible to see it zag after the current zig, but we think the recent report portends a reversal of the two-year trend, and we will see the gap narrowing further, adding to GDP growth in the second quarter.
Meanwhile, consumer credit made bad headlines this week as it expanded by $38.1 billion in April after an already sizeable increase in March. This increase suggests that consumers are relying more on credit for their purchases, which could become a burden should they face trouble repaying this debt. Zooming in on details, however, much of this growth was due to an acceleration in revolving credit, which has only just recovered to its prepandemic level(Chart 2). This conincides with a normalization in spending on discretionary services, such as in-person entertainment and travel, which are usually financed by revolving credit, such as credit cards. As long as household income stays on the rise, credit growth should remain sustainable.
Maria Solovieva, CFA, Economist | 416-380-1195
This Financial News report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this financial news report has been drawn from sources believed to be reliable but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.
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Financial News for the Week of June 3rd, 2022
Financial News Highlights
- The U.S. economy continued to add jobs in May, though at a slower pace than in the previous month. The unemployment rate held steady at 3.6% and the labor force participation rate edged up by 0.1 percentage point.
- Job openings remained elevated at 11.4 million, even while workers continued to quit their jobs. With job openings exceeding the number of unemployed workers, labor market conditions may remain tight for some time yet.
- Both manufacturing and services activity continued to expand in May, though services did so at a slower rate. Both sectors also felt the hiring pinch, as the availability of workers dwindled.
U.S. -Jobs Abound but Too Few Workers Around
This week marks the start of a new month and with it, the start of the Fed’s quantitative tightening program in financial news. As it tightens monetary policy to fight inflation, the Fed will allow up to $47.5 billion of its treasury and mortgage-backed securities holdings to mature this month without reinvesting the proceeds. The net effect should help to push rates higher and tighten financial conditions, helping ease price pressures.
The Fed’s Beige Book also reported that companies continued to struggle with rising prices and labor shortages during the spring, resulting in modest economic growth. The report notes however, that consumers are starting to push back on higher prices, thereby limiting companies’ ability to fully pass on cost increases. To deal with labor shortages some businesses implemented greater automation, offered more job flexibility, and/or increased wages.
Job opening data for April further reinforced the tight labor market narrative. There were 11.4 million job openings in April, a pullback from the 11.9 million record attained in the previous month, but still well above pre-pandemic figures. Churn in the market remained elevated with workers quitting their jobs 4.4 million times, little changed from the prior month. The number of job openings has exceeded the number of unemployed persons looking for work for much of the past year (Chart 1) as fewer persons are seeking employment relative to before the pandemic.
The trend is set to continue as the U.S. added 390k jobs in May, lower than the 436k in April but ahead of market expectations for 325k (see here). Job gains were notable in leisure and hospitality, professional and business services, and in transportation. Notably, employment in retail trade declined. The unemployment rate held steady at 3.6% – close to the 50-year low of 3.5%. While the labor-force participation rate continued to recover at 62.3%, it was still below the 63.4% attained prior to the pandemic, thereby contributing to the labor supply slump (Chart 2).
The ISM manufacturing survey showed that activity in the sector continued to accelerate in May despite supply-chain and pricing challenges (see here) in financial news. The index came in at 56.1, exceeding April’s 55.4 print. New orders, backlogs of orders and the production index all rose, reflecting manufacturers’ struggles to keep up with above-trend demand for goods.
Conversely, while still in growth territory, activity in the services sector decelerated in May to 55.9 from 57.1 (see here). Despite new orders being higher on the month, business activity pulled back 4.6 points to a two-year low of 54.5. Services activity is expected to pick-up speed as summer progresses, though rising prices present challenges.
Despite current strong economic conditions, consumer confidence took a hit for the second consecutive month as high inflation soured the outlook. The Conference Board consumer confidence index dipped to 106.4 in May, from 108.6 in April, with both the present situation and the expectations index declining. Rising inflation, and measures to counteract it, may be putting a damper on consumers as they brace for the possible fallout.
Shernette McLeod, Economist | 416-415-0413
This Financial News report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.
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Financial News for the Week of May 27th, 2022
Highlights
- The second estimate of U.S. GDP growth confirmed that the economy contracted in the first quarter of the year, pulling back by 1.5% relative to the 1.4% reported previously.
- The housing market continued to show signs of buyer wariness as rising prices and mortgage rates erode affordability, resulting in slumping sales both for new and existing properties.
- U.S. consumers continued to post growth in both nominal income and spending in April. Continued price pressures, however, kept real income flat. On the upside, the annual pace of price increases abated in April, as headline personal consumption expenditure inflation decelerated from 6.6% in March to 6.3% in April.
U.S. - Walking the Inflation-Growth Tightrope
Economic developments for the week point to a U.S. economy that is in transition in financial news. As policymakers try to steer the economy from the current high inflation environment, they must walk a tightrope so as not to inflict too much damage on growth. The second estimate of first quarter GDP suggests that it is indeed a delicate balance that will have to be struck. The economy is now estimated to have contracted by 1.5% through the first three months of 2022, slightly lower than the 1.4% previously reported (see here). The revision mainly reflected lower investment in inventory. On the upside, consumer spending and business investment continued to show strong domestic demand.
On that front, orders for durable goods decelerated in April to 0.4% month-on-month (m/m), from a downwardly revised 0.6% in March. Core capital goods orders, a closely watched proxy for business investment, rose 0.3%. The report suggests that business investment growth is starting to taper as interest rates rise. Manufacturers however have a substantial backlog of orders to fulfill, which should continue to support investment in the near term.
The Fed’s mission to tame inflation is likely to see rates rise even further in financial news. Minutes of the Fed’s May meeting reinforced previous messaging as policymakers discussed getting to a neutral rate expeditiously, as well as the possibility of tightening policy to restrictive levels. Such a move would be dependent on the evolving economic outlook, which is currently shrouded in a great deal of uncertainty. We continue to expect two successive 50 basis point rate increases at the Fed’s June and July meetings.
Rising interest rates are also taking some steam out of the white-hot U.S. housing market. Mortgage rates have risen sharply, and this has resulted in a pullback in buyer demand. Contracts for sales of existing homes (-3.9% m/m) as well as sales of new homes (-16.6% m/m) fell in April – both posting the largest declines since before the pandemic (Chart 1). Prices however continued to trek upwards with the median price for new homes rising 19.6% year-on-year to $450,600. The combination of high prices and rising rates is likely to see the market cool even further as affordability becomes an issue for more and more buyers.
The Congressional Budget Office also released an updated outlook this week and is expecting both inflation and economic growth to cool later this year and into 2023. On a fourth quarter-over-fourth quarter basis, the agency expects the economy to grow by 3.1% in 2022 and by 2.2% and 1.5% in 2023 and 2024 respectively. CPI inflation is projected at 4.7% for 2022, 2.7% for 2023 and 2.3% for 2024. These forecasts were completed prior to further fallout from the Russia-Ukraine war. As such, the inflation numbers are likely to come in higher than predicted.
To cap off the week, nominal income and spending were up in April by 0.4% and 0.9% m/m respectively (see commentary) in financial news. However, due to inflation real disposable income was flat. On the upside, both headline and core personal consumption expenditure (PCE) inflation decelerated in April (Chart 2). Yearly core PCE inflation cooled from 5.2% in March to 4.9%, still well above the Fed’s comfort zone, but moving in the right direction.
Shernette McLeod, Economist | 416-415-0413
This Financial News report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.
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Should You Undo Your Retirement and Go Back to Work?
Should You Undo Your Retirement and Go Back to Work? These Questions Might Give You the Answer.
Many retirees have blind spots that could prevent them from seeing why it might make sense to get back to work from retirement, at least part time
A tight labor market and flexible work options in the gig economy would seem to make re-entering the job market from retirement an enticing prospect for retirees. And many are doing just that.
But behavioral economics tells us that there are likely a lot more retirees who would return to the workforce, if only they weren’t held back by cognitive blind spots. These blind spots cause them to ignore the possibility of returning to the workforce—even if working at least part time would make them more satisfied and financially better off.
Are you one of those people? The following self-assessments can help you measure your own vulnerability to these blind spots, and whether you should consider returning to the labor market and try a part-time job.
The value of spare time
Let’s start with a pair of questions on consumer behavior, adapted from research by the behavioral economist Ofer Azar, that measures your willingness to trade time for various discounts:
You found a pen you like for $3. You hear that it is on sale at another store, 20 minutes away. How much cheaper would the pen have to be for you to drive to the other store?
- 50 cents cheaper
- $1 cheaper
- $2 cheaper
- I wouldn’t make the drive if it was free
You found a shirt you like for $30. You hear that it is on sale at another store, 20 minutes away. How much cheaper would the shirt have to be for you to drive to the other store?
- $5 cheaper
- $10 cheaper
- $20 cheaper
- I wouldn’t make the drive even if it was free
The size of the discount you were willing to drive for can help determine how you value your time. For instance, if you’re willing to drive 20 minutes to save $2 on a pen, then you value your time at roughly $6 an hour. That’s less than half of the minimum wage in most states. If you’re willing to drive 20 minutes to save $10 on a shirt, then you value your time at roughly $30 an hour. That might sound like a lot. But consider that, for example, the typical hourly rate for a dog walker on the pet-services site Rover in my neighborhood is $40 an hour.
Time is an asset. Unfortunately, undervaluing your time might also make you less likely to work, since you fail to consider the ways that your time could become a source of income. Retirees who undervalue their time should consider ways that part-time work can translate into real income. Instead of making multiple 20-minute trips to save $30, you might enjoy taking a long walk with a dog that earns you $40. You’re $10 ahead, and you get some exercise.
The power of semiretirement
Here’s the next set of questions, which are drawn from research on dichotomous thinking by psychologist Atsushi Oshio. To what extent do you agree with the following statements?
There are only winners and losers in this world.
- Strongly disagree
- Disagree
- Neutral
- Agree
- Strongly agree
I want to clearly distinguish between what is safe and what is dangerous.
- Strongly disagree
- Disagree
- Neutral
- Agree
- Strongly agree
Information should be defined as either true or false.
- Strongly disagree
- Disagree
- Neutral
- Agree
- Strongly agree
These questions are designed to measure your “binary bias,” which is the tendency to see the world in black-and-white terms. In the 20th century, retirement was mostly a binary choice: You worked full time or you didn’t work at all. There were limited opportunities for retirees to work part time. Now, the gig economy offers older individuals a range of work options, in terms of both the work itself and the number of hours you can work.
Unfortunately, too many older individuals are still stuck in the 20th-century work mind-set. If you answered “Agree” or “Strongly agree” to the questions above, your binary bias might lead you to neglect part-time work opportunities that can boost both your income and your overall well-being. For retirees looking to overcome this bias, it might be helpful to start off small: Look for a paid activity that you only need to do once a week, or an hour or two a day. By starting off this way, you are more likely to stop viewing working as an all-or-nothing option.
Rise and Decline
Percent change in the civilian labor force, by age
Test-driving your retirement
Here is the last question, which draws from psychological research on our assumptions about happiness.
Imagine someone similar to you in age and personality. Do you think this person would be more satisfied with their life if they lived in the Midwest or California?
- Midwest
- California
- Same
Financial News for the Week of May 13th, 2022
FINANCIAL NEWS HIGHLIGHTS OF THE WEEK
- US retail sales rose by 0.9% m/m, while the control group grew by a stronger 1% m/m. Revisions to the month prior were also positive, suggesting Q1 spending ended the quarter on a firmer footing.
- Home sales fell by 2.6% m/m to 5.6M units in April, as deteriorating affordability continues to weigh on demand. Housing starts (-0.2% m/m) also recorded a modest decline but remain at a healthy 1.7M units.
- Inflation continued to accelerate across the G-7 into April as the effects of rising food and energy prices continue to be felt.
- Moving forward, higher interest rates and reduced real disposable incomes will weigh on demand and help to cool inflation by narrowing the wedge between demand and supply.
U.S. -Spending Through the Pain
US equities extended one of their worst losing streaks since 2008 this week, having now recorded seven consecutive weeks of declines in financial news. At the time of writing, the S&P 500 is down 2% on the week, and a far greater 18% year-to-date. The selloff in stocks fueled a rally in US treasuries, pushing the 10-year yield down by 10 basis points to 2.83% (Chart 1).
Sentiment soured early in the week as U.S. brick-and-mortar retailers drastically cut future earnings expectations. The common theme was that they are struggling with higher inflation, wages pressures and rising freight costs, all of which are cutting into profits. The dour reaction from financial markets appears to be rooted in the growing concern that the US economy is on the verge of a recession. Investors interpreted the disappointing earnings as a sign that consumers are already on a more precarious footing, further fanning the recession rhetoric. We see things a bit differently.
For starters, many of these big box retailers operate in an environment where margins have always been relatively thin. Even in “normal times”, their ability to pass-on higher costs to consumers is quite limited given the competitive nature of the retail landscape. This problem has been heightened of late, as retailers moved to replenish severely depleted inventories late last year even as consumer demand was already pivoting from goods in favor of services. Retailers were left holding significant inventory, forcing them to discount some merchandise, cutting further into profits.
Retail sales data for April corroborate the notion that consumer spending remains healthy. Headline sales were up 0.9% month-on-month (m/m), while the control measure was up an even stronger 1% m/m. Removing the effects of inflation from the control group did little to change the story, as real sales rose by a healthy 0.9% m/m. Revisions to the prior month were also positive, suggesting consumer expenditures ended last quarter on a much firmer footing than previously thought. While spending is expected to remain robust over the near-term, the combination of higher interest rates and persistent inflationary pressures will present a material headwind in the second half of this year and into 2023. Spending is expected to moderate to a sub-2% pace, though remain supportive of underlying economic growth.
Outside of consumer spending, higher interest rates continue to weigh on housing demand. Existing home sales fell for the third consecutive month in April, falling by 2.4% m/m to 5.6M units (Chart 2). Inventory remained incredibly tight, though the pullback in sales did allow supply to nudge a touch higher to 2.2 months – from 2 months in March. Even still, the market remains undersupplied, which is helping to sustain double-digit price growth of 14.8% y/y.
Housing supply relief is coming, but it is taking longer than expected to come to market in other financial news. Despite recording a modest pullback in April, housing starts remained at a healthy 1.7 million units, while permitting activity continues to point to further gains in construction activity in the months ahead. The combination of softening demand and increased supply should go a long way in rebalancing the market over the coming months, and better align price growth to underlying fundamentals.
Thomas Feltmate, Director | 416- 944-5730
Global- Energy Prices Eat into Buying Power
It's inflation week in the G-7 as the European Union, the U.K., Canada, and Japan all released detailed April inflation numbers. The U.K. made headlines as the consumer price index (CPI) measure reached an eye-watering 9.0% year-over-year (y/y) – the broader measure that includes home ownership services advanced by a more modest 7.8%. Even in Japan inflation hit a seven and a half year high as headline CPI growth reached 2.5%. In general, the surge in energy prices is the rising tide that is lifting the cost of living at a multi-decade high pace.
Headline CPI for April in the euro area was 7.3% y/y, while the measure excluding food and energy moved to 3.8%. By comparison, the U.S. registered 8.3% headline and 6.2% core advances, while Canada's release this week showed a 6.8 % and 4.6% increase (Chart 1). The magnitude of the energy shock Europe is witnessing now can't be understated. Energy prices are up 37.5% y/y, 7.3 percentage points ahead of the U.S. and a whopping 11.1 percentage points more than Canada. In the U.K., April saw the semi-annual adjustment to price caps on retail energy products. The cap increase produces abrupt jumps in energy costs followed by relative lulls (like a staircase) that ultimately tracks with the smoother European price profile (Chart 2).
That said, core measures (excluding food and energy) of inflation in most of the G-7 countries are well ahead of policymakers' targets. This reflects demand continuing to outstrip supply as the global economy reckons with a sequence of supply-side shocks.
As inflation continues to accelerate central bankers are concerned about longer-term inflation expectations rising and the entrenchment of a wage-price spiral in financial news. That's a key part of the reason why they continue to signal more monetary tightening despite the risk of a slowdown in growth.
Higher interest rates will work to weaken demand growth, albeit with a lag. The effect of inflation on purchasing power will be more immediate. Measures of wages in the U.K. and Europe are not keeping up with inflation. Average weekly earnings in the U.K. (adjusting for purchasing power) are up 3.5% y/y but, when bonuses are excluded, underlying real wages are down 2.0%. Euro area measures are released with a significant lag, but collectively bargained pay in Germany and Italy (which generally track underlying wage growth) are also lagging inflation. Notably, real hourly contractual wages in Japan were up 1.3% in March. However, in general, wage growth is not keeping up with inflation, so consumers will either be tapping accumulated savings or scaling back on purchases.
Moving forward, output growth will slow through the latter half of the year as inflation and higher interest rates erode purchasing power and slow expenditures. The softer demand backdrop will also help to cool inflation as the wedge between demand and supply narrows in further financial news.
Andrew Hencic, Senior Economist | 416-944-5307
This Financial News report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.