The Delta variant has taken a toll on the growth of the US economy. Goldman Sachs has reduced its third-quarter GDP growth from 9% to 5.5%. Even with these growth concerns, it appears that the market wants to go higher. Every time we have a dip in the market, investors rush in to use it as an opportunity to buy. There is $4 trillion on the sidelines and that money is looking for opportunities. I think the key going forward is where to invest, and not whether you should invest.

Where to invest?

A few weeks ago I mentioned that we are overweight in cyclicals. If you believe that the 10-year US Treasury (chart above) has bottomed then cyclicals should perform well, especially in the energy and financial sector. The market will always give us opportunities – hopefully we can find them.

I've also included a piece from our CIBC Economics Team entitled "Not all trillions are alike".

As always if you have any questions feel free to give us a call at any time.

Have a great weekend.

Milan