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TRANSCRIPT
July 31, 2020
Monthly Economic
Report
Mackenzie Investments Market Insights
Source: Bloomberg (Jul 2020)
Commodity Overview
2
0
50
100
150
200
250
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Bloomberg Commodity Index – 15 Year Performance to July 31, 2020
68.67
Mackenzie Investments Market Insights
Source: Bloomberg (Jul 2020)
Crude Reality: Price of Oil
3
$0
$20
$40
$60
$80
$100
$120
$140
$160
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
West Texas Intermediate (USD per barrel) – 15 Year Price to July 31, 2020
$40.27
Mackenzie Investments Market Insights
Source: Bloomberg (Jul 2020)
Gold (USD/troy ounce) – 15 Year Price to July 31, 2020
Gold Bullion
4
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$2,200
Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Jul-20
$1,975.86
Mackenzie Investments Market Insights
Source: Bloomberg (Jul 2020)
Foreign Exchange Rates
5
USD Comparisons – 1 Year Rates to July 31, 2020
Yen vs. USD Euro vs. USD CDN vs. USD
100
102
104
106
108
110
112
114
Jul-19 Jan-20 Jul-201.04
1.06
1.08
1.10
1.12
1.14
1.16
1.18
1.20
Jul-19 Jan-20 Jul-20
1.25
1.30
1.35
1.40
1.45
1.50
Jul-19 Jan-20 Jul-20
Mackenzie Investments Market Insights
Source: Bloomberg (Jul 2020)
Emerging Market Currencies
6
20
30
40
50
60
70
80
90
100
110
120
Jul-
17
Au
g-1
7
Sep
-17
Oct
-17
No
v-1
7
De
c-17
Jan
-18
Feb
-18
Ma
r-18
Ap
r-1
8
Ma
y-1
8
Jun
-18
Jul-
18
Au
g-1
8
Sep
-18
Oct
-18
No
v-1
8
De
c-18
Jan
-19
Feb
-19
Ma
r-19
Ap
r-1
9
Ma
y-1
9
Jun
-19
Jul-
19
Au
g-1
9
Sep
-19
Oct
-19
No
v-1
9
De
c-19
Jan
-20
Feb
-20
Ma
r-20
Ap
r-2
0
Ma
y-2
0
Jun
-20
Jul-
20
Brazil Real Chilean Peso South African Rand Russia Rouble
Indian Rupee Turkish Lira Argentine Peso Chinese Yuan
(Indexed to 100 on July 31, 2017)
Exchange rates against the U.S. Dollar – 3 Year Rates to July 31, 2020
Mackenzie Investments Market Insights
Source: Bloomberg (Jul 2020)
Currency – The Hidden Difference
7
90
95
100
105
110
115
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20
USDCAD
EURCAD
JPYCAD
Canada U.S. Euro Area Japan Emerg. Markets China WorldS&P/TSX S&P500 MSCI Europe NR MSCI Japan NR MSCI EM NR MSCI China NR MSCI World
Local Currency Returns 1.9% 12.0% (7.7%) (1.3%) 10.7% 23.8% 5.5%
CDN$-Based Returns 1.9% 14.2% 0.7% 3.4% 8.7% 27.0% 9.4%
(Indexed to 100 on July 31, 2019)
Foreign currencies vs. Canadian Dollar – 1 Year Rates to July 31, 2020
Mackenzie Investments Market Insights
Source: Bloomberg (Jul 2020)
A View of Global Market Indices
8
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
19,000
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20
S&P/TSX Composite Index Prices - 12 months ending July 31, 2020
S&P/TSX S&P 500 Euro Area Japan Emerg. Mkts China World
1-Year returns to Jul 31: 1.9% 12.0% (7.7%) (1.3%) 10.7% 23.8% 5.5%
Year-to-Date: (3.3%) 2.4% (12.8%) (11.1%) 2.2% 13.0% (2.1%)
Quarter-to-Date: 4.5% 5.1% (1.5%) (2.4%) 7.7% 9.1% 3.1%
Month-to-Date: 4.5% 5.1% (1.5%) (2.4%) 7.7% 9.1% 3.1%
Mackenzie Investments Market Insights
Source: Bloomberg (Jul 2020)
0
500
1,000
1,500
2,000
2,500
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Global Market Results
9
S&P/TSX Composite Index
S&P 500 Index
MSCI Europe Index
MSCI Japan Index
2020
-3.32%
2020
2.38%
2020
-12.84%
2020
-11.07%
Mackenzie Investments Market Insights
Source: Bloomberg (Jul 2020)
S&P/TSX by Sector
10
S&P/TSX returns for 2019 and 2020 YTD
S&P/TSXComposite
Index
InformationTechnology
MaterialsConsumer
StaplesUtilities Industrials
ConsumerDiscretionary
TelecomServices
Financials Real Estate Energy Health Care
2020 (3.3%) 71.9% 30.5% 7.6% 4.3% 1.6% (7.1%) (7.8%) (15.5%) (17.5%) (29.6%) (30.1%)
2019 22.9% 64.9% 23.8% 14.4% 37.5% 25.5% 15.3% 13.0% 21.4% 22.6% 21.7% (10.9%)
(40%)
(20%)
0%
20%
40%
60%
80%
Mackenzie Investments Market Insights
Source: Bloomberg (Jul 2020)
Central Bank Rates
11
Central Bank Rates and 10-Year Gov't Bond Yields - 3 Years to July 31, 2020
Canada United States
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Jul-17 Jul-18 Jul-19 Jul-20
Canada - Overnight Rate 10-Year GoC
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Jul-17 Jul-18 Jul-19 Jul-20
US - Overnight Rate 10-Year Treasury
Mackenzie Investments Market Insights
Source: Bloomberg (Jul 2020)
Central Bank Rates Around the Globe
12
Central Bank Rates - 10 Years to July 31, 2020
0%
1%
2%
3%
4%
5%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Australia
Canada
England
USA (Upper Range)
ECB
Mackenzie Investments Market Insights
Source: Bloomberg (Jul 2020)
10 Year Government Bond Yields
13
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
US
Can
ada
Me
xico
Ge
rma
ny
Bri
tain
Fran
ce
Ital
y
Spa
in
Gre
ece
Swit
zerl
and
Jap
an
Au
stra
lia
New
Ze
ala
nd
Ho
ng
Ko
ng
Sou
th K
ore
a
Ind
ia
Americas Europe Asia
Today
3 months ago
12 months ago
As of July 31, 2020, 3 months ago and 1 year ago (bps)
Source: Bloomberg (Jul 2020)
Mackenzie Investments Investing Insights 14
Global Market Results
Equity Market Returns Bond Market Returns
0%
50%
100%
150%
200%
250%
300%
350%
400%
Canada US EU Japan
-2%-1%-1%0%1%1%2%2%3%3%4%4%
Canada US EU Japan
up to July 31, 2020; total returns indexed to 100, local currency up to July 31, 2020; local currency
Source: Bloomberg (Jul 2020)
Mackenzie Investments Investing Insights 15
Bull & Bear Markets
-26% -17% -15% -25% -35% -39%-25% -20% -27% -38%
-21%-43%
-17%
85% 81%63%
82%
288%
253%
44%
203%
109%
16%
168%195%
4%
-100%
-50%
0%
50%
100%
150%
200%
250%
300%
350%
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Ch
ange
Average gain in bull market: 131%
Average length of bull market: 54 months
Average loss in bear market: (27%)
Average length of bear market: 9 months
Bull & Bear Facts
S&P/TSX Composite Index to July 31, 2020
Source: Bloomberg (Jul 2020)
Mackenzie Investments Investing Insights 16
Bull & Bear Markets: S&P/TSX Composite
The Risks and Rewards of Investing:
▪ This chart represents the bull and bear markets in the S&P/TSX Composite Total Return since 1956. All bars above the line are
bull markets; all bars below are bear markets.
▪ For the purposes of this illustration, a bull (bear) market is defined as a positive (negative) move greater than 15% that lasts at
least 3 months.
Investor Behaviour:
▪ According to the chart, markets spend more time in positive territory (bull) than negative (bear).
▪ Bull markets are, on average, longer and more intense, providing a more significant percentage change.
▪ On average bear markets are more brief, and yet engender fear. It is during these periods that there are significant investment
‘bargains’ to be found.
▪ Investor discipline during bear markets is critical.
Source: Bloomberg (Jul 2020)
Mackenzie Investments Investing Insights 17
Bull & Bear Markets
104% 90%52%
76% 86% 87%
280%
72%
526%
108%
451%
6%
-14% -22% -16% -29% -43%-14% -17% -30% -15%
-45% -51%-12%
-100%
0%
100%
200%
300%
400%
500%
600%
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Ch
ange
Average gain in bull market: 150%
Average length of bull market: 51 months
Average loss in bear market: (26 %)
Average length of bear market: 13 months
Bull & Bear Facts
S&P 500 Index to July 31, 2020
Source: Bloomberg (Jul 2020)
Mackenzie Investments Investing Insights 18
Bull & Bear Markets: S&P 500
The Risks and Rewards of Investing:
▪ This chart represents the bull and bear markets in the S&P 500 Total Return since 1956. All bars above the line are
bull markets; all bars below are bear markets.
▪ For the purposes of this illustration, a bull (bear) market is defined as a positive (negative) move greater than 15% that lasts at
least 3 months.
Investor Behaviour:
▪ According to the chart, markets spend more time in positive territory (bull) than negative (bear).
▪ Bull markets are, on average, longer and more intense, providing a more significant percentage change.
▪ On average bear markets are more brief, and yet engender fear. It is during these periods that there are significant investment
‘bargains’ to be found.
▪ Investor discipline during bear markets is critical.
Mackenzie Investments
▪ This document includes forward-looking information that is based on forecasts of future events as of July 31, 2020.
▪ Mackenzie Financial Corporation will not necessarily update the information to reflect changes after that date. Forward-looking statements are not
guarantees of future performance and risks and uncertainties often cause actual results to differ materially from forward-looking information or
expectations. Some of these risks are changes to or volatility in the economy, politics, securities markets, interest rates, currency exchange rates,
business competition, capital markets, technology, laws, or when catastrophic events occur. Do not place undue reliance on forward-looking information.
In addition, any statement about companies is not an endorsement or recommendation to buy or sell any security.“
▪ The content of this document (including facts, views, opinions, recommendations, descriptions of or references to, products or securities) is not to be
used or construed as investment advice, as an offer to sell or the solicitation of an offer to buy, or an endorsement, recommendation or sponsorship of
any entity or security cited. Although we endeavour to ensure its accuracy and completeness, we assume no responsibility for any reliance upon it.
▪ Unlike mutual funds, the returns and principal of GICs are guaranteed.
▪ Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus
before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
Index performance does not include the impact of fees, commissions, and expenses that would be payable by investors in the investment products that
seek to track an index.
▪ The rate of returns shown is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of returns on
investment."
19
Disclaimer