After a quiet end to the summer months, we expect a more eventful Fall, with a full schedule of political, fiscal and monetary events.  We wanted to highlight the key issues and events that we’ll be watching in the months’ ahead, always with a mind to how they might impact our portfolios and positioning.

• Politics: Canada is not the only G7 nation with a controversial election coming up.  Germany is heading to the polls on Sept 26 with no clear leader in the polls, and Japan’s ruling Democratic party will be holding a leadership convention at the end of the month to determine if Suga will maintain control.  Leaders from China and the U.S. are slated to have their first meeting at the G20 Summit on Oct 20^th, though little progress is expected on the removal of tariffs put in place by the Trump administration.  Tensions will remain high in China’s tech sector as regulators forward their agenda for a “common prosperity.”
   
• Monetary Policy:  Borrowing costs are top of mind for most investors, and the key central banks are expected to unveil plans to slowly remove the stimulus they put in place to mitigate the economic fallout from the Covid lockdowns of 2020.  The U.S. Federal Reserve is next slated to meet on September 22, with Fed officials expected to shed more light on when they will start to slow their monthly purchases of bonds (expectations are for that to start in December), and, with inflation remaining stubbornly above-trend, to start hiking rates (3 rate hikes are expected in 2023).  After their meeting last week, the European Central Bank is now expected follow suit and will slow their bond purchases later this year.  China is heading in the opposite direction, making money more easy to borrow to combat the slowdown there earlier this year.  On cryptos, the Federal Reserve is expected to release its report on digital currencies in the coming weeks, where they will outline their plans for a central bank digital currency to combat the ascendancy of bitcoin and its brethren.
   
• Fiscal Policy:  While spending on health care and infrastructure and raising taxes are key components of the NDP platform, they are also key components of the $3.5T fiscal stimulus bill making its way through Congress in the U.S.  There is little hope for this bill to make its way into law, as prominent Democratic Senator Joe Manchin made clear in a Wall Street Journal op-ed.  However, even a $1T stimulus bill will likely involve some tax hikes, something the Democrats want to get out of the way well before the 2022 mid-term elections.  
   
• COVID-19: While COVID-19 numbers are surging in the U.S., they are leveling off in other parts of the world, and investors have focused on how quickly companies (and the broader economy) have adapted to each successive wave, rather than dwell on the drags it is causing to the entertainment industry or supply chains. 
   
• Inflation: We are about the head into Q3 earnings season, and supply chain interruptions and rising labour costs are expected to weigh on company margins and profitability.  To date, this has not led to downward earnings revisions (earnings have handily beaten expectations) but this is something to closely monitor at a time of elevated valuations.
   

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