Thursday, September 21, 2017

Money Show 2017 - Benjamin Tal

Benjamin Tal spoke in the opening ceremonies on "Where in the World Are We". Benjamin Tal is Deputy Chief Economist at CIBC Capital Markets. Their site is

Should you be trading Trump? No you should not. Trump is but a blip. Trump has not changed the markets at all. Prior to Trump the US economy had a GDP growing at 2.1% and today the GDP is 2.1%. The global economy is doing well. The Trump market is up but so is Japan and France. Something is going on, but it is not Trump.

The global economy is responding to the Central Banks. The global economy's potential is slowing down. We are all turning into Japanese. The Japanese economy has been trying to move for the past 20 years. Part of this is due to demographics. Benjamin Tal believes that China is slowing and it is not growing at 6.5%.

In Europe, all have survived the elections in Netherlands and France and will survive the German election. You cannot put Germany and Italy together and expect good things to happen. Brexit was the big story for 6 to 7 months, but Teresa May does not know what to do. Nothing is happening in the UK, but Brexit is not positive for the UK.

Trump is a blip, but his message is not. Long term employment in the US is lower than prior to 2008. US wages are low for many workers so there are a lot of people on disability. The reality is that Trump does not have a solution. When Trump cannot get jobs back, his voters will vote for the extreme left.

Canada has the most educated in the OECD, but this has not translated into jobs. People are not educated for the jobs of today. This is the number one issue facing our society. Trump is the messenger for people crying for jobs. We have jobs without people and people without jobs. This is the Japanese problem. Canada and the US are becoming the North American version of Japan.

In the US the companies' earnings will not match expectations. So the US market will fall. Trump may lower taxes and this will help small caps. However, Trump needs China more than China needs the US. China must be part of the solution. The taxing of China's goods will impact badly poor people.

It is the consumer markets in developing countries that will be the future. If the US tax on China cuts off selling goods to China this will hurt US manufacturing. Canada and Mexico are now friends, but if NAFA changes then Trudeau will change sides to the US side. The Bank of Canada will slow down rate increases. Financials are a good bet for the future and they will do better. Canada has the best economy but the lowest market results.

On my other blog I wrote yesterday about Telus Corp. (TSX-T, NYSE-TU)... learn more. Tomorrow, I will write about Wajax Corp. (TSX-WJX, OTC- WJXFF)... learn more on Friday, September 22, 2017 around 5 pm.

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