Issue 50 – True North

A Snapshot of the Week Ended December 4, 2020:

The S&P 500 continued to climb higher in spite of higher Covid cases, hospitalizations and deaths, rising 32 points, or 0.9% to a new all-time high of 3699. Economic prints were generally in line with expectations. However, the employment numbers were disappointing but not terrible enough to halt the trajectory of the stock prices and other important markets. Commodity prices, like oil, copper and gold and long-term bond yields, rose strongly. Meanwhile the dollar continued to slump against a basket of its peers, bringing the decline in the DXY to 90.79, 7% for the year—the lowest level since April 2018. I’m not surprised. In the past five weeks the U.S. money supply (M2) has accelerated to an annualized rate of 18.2% because of a whopping $212 billion drawdown of government deposits. Investors should note that M1, the most transactional part of the money supply, is up 56.8 % year over year and now accounts for an amazing 33% of the aggregate money supply. That could lead to a significant increase in the turnover of money.


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By Hubert Marleau

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By Hubert Marleau

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