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[music] Hello I'm Greg Bonnell and welcome to MoneyTalk Live which is brought to you by TD Direct Investing. Coming up on today's show: Will have a look at how many more Fed rate hikes could be ahead with the TD economics James Marple. Epic Investment Partners co-CEO Bill Booth will lay out why higher inflation and slower growth may be here to stay. And we will hear from TD Asset Management Michael O'Brien on whether Canadian inflation is cooling enough for the BOC to ease its rate hiking cycle. Plus in today's WebBroker segment, Jason Hnatyk will explain the difference of a market and limit orders and how you can make them on the platform. But first let's get you updated on the market action today. We will start on Bay Street with the TSX Composite Index and a deficit at almost 540 points. energy, financials and materials, the big three, the price of West Texas crude… Some of the biggest plays in the energy badge pretty hard in terms of the energy prices today. Suncor today, down to the tune of almost 9%. That doesn't mean there are not a few bright spots but they are harder to find in a day like this. At Dye & Durham, says those takeover talks we've been hearing about with the link have been terminated. The streets seems to like the sound of that. Dye & Durham up 5% among a handful of names right now that are in positive territory on Bay Street. South of the border, let's check in the S&P 500, not escaping the pain of the day right now. That brought a read of the American market, down a full 2% over 76 points. The tech heavy NASDAQ, we want to see what's happening in that space. Not quite as hard. Still in negative territory though. And on Bay St. in Wall Street, the energy names, the big plays they are getting hit fairly significantly. We have ExxonMobil. $85.70 down a little more than 5%. And that's your market update. Joining us now for more on what's going on with the volatility we are seeing in the marketing is MoneyTalk Live's Anthony Okolie. A big week for market moving events. >> I mean just getting back to the Summer when we talked of the Summer rally and there is talk about inflation peeking and perhaps we could see the Fed pivoting to slowing down rate hikes, and now, we have the opposite. We have the Federal Reserve coming out and saying "look, we will aggressively fight inflation. We will hike interest rates. How aggressively will this be? What impact will that have on the economy? Could we potentially see a recession? We do see fear gripped the markets right now. >> Our chief economist at TD economics was talking about all the central bank action we've seen. From her perspective, she thought it was an interesting time because of the banks looking forward so much as to what all these rate hikes. And they have been big rate hikes, what they're doing on to the economy. Focusing on the present day. The inflation, the fact that it's not cooling as much is she anticipated. A very curious time. The central banks are saying "we do this now, what happens 12 to 18 months from now? Some pretty big rate hikes". >> We saw from the Bank of England, it hiked rates. The Swiss National Bank as well. In Norway 50 basis points as well. So there is certainly focus on inflation. That seems to be the message from the central banks. Focusing on inflation now and bringing it down to a manageable target. We know that there is good to be some pain on the economic front. On the jobs front as well. There will be unemployment caused by this. But the world will forgo that a just focus on inflation in the near term. >> When we talk about what the central banks are up to, the concern over whether they go too far. And we don't get the soft recession. Or this recession that we barely even know. A pretty tough recession that seems to be playing in the oil trades. West Texas intermediate at 78, 50 on my screen. You talk about a pullback of 6% of the session. That seems to be firmly on this fear that perhaps if they do go too far we will end up with a pretty tough recession on our hands. >> Certainly, not just that, consumer confidence and what impact will that have on consumer spending going forward. Certainly inflation has an impact. But also for corporations. Higher borrowing costs for them. What impact will that have on corporate profits looking out? I mean we have third-quarter earnings coming out soon. So we certainly have to wait and look and see what comes from that. But again, as you mentioned, there's a lot of fear right now the markets. >> The big event of the week was clearly Wednesday, the US Federal Reserve. Not only the height of what we heard from Jerome Powell. >> One of the things James Marple noticed was how little that Fed statement has actually changed. Take a listen. >> 75 basis points in hikes, broadly, have been expecting that rate hike. What was a little more surprising was their accompanying survey of economic route projections when they surveyed the number of the FOMC, both those that are voting and those that are not. Then you saw a real upward migration and where they anticipate the federal funds going from now. As you said, they brought that up to 4.4% and they see even more hikes over the course of the next year. So, that's the big change. They also brought down their economic projections quite a bit. Marking to the day we've seen this year, no economic growth over the course of 2022. Of course we have those first two quarters where growth was actually negative so that makes some sense. But then that weakening of growth next year by an almost equal amount and having a below trend economic growth continue through next year. And just as important, they now have real notable upward migration and the unemployment rates. So they previously had that under 4% which is sort of where they see it over the long term. They now have it at 4.4% and staying there in 2023 and 2024. So they are clearly saying "we are going to have to see some economic pain in order to bring inflation down." And just on the inflation front, they also upwardly revise their inflation forecast and expected to take a bit longer to get back to their 2% target. >> That economic growth, there will be some pain because of that. I want to go back to what you mentioned, the FOMC does not expect to see if Fed funds medium rate of about 4.4% by the end of the year. Where do you see rates going from there? >> Well, probably still higher. 3.25%. Probably more hikes to come still. We think that will get at least to 4% by the end of this year and of course we will have to watch the economic data if we continue to see inflation surprises as we have. That's job number one that they are solely focused on. So that's what we would probably see rates have to go even higher if they get any luck on the inflation front. You know, maybe a little like we saw in Canada were inflation is surprisingly a little bit lower in coming down and making one step to the right direction. Maybe they want to hike as much but the Fed chair was pretty consistent on that. They are watching measures of inflation. They do want to make the mistake of calling an occult decline temporarily. >> They want to see core inflation moving down, certainly. I want to get to the markets. How of bond markets reacted to these comments? Certainly we've seen particularly the two year treasury. Its yield has gone up and touched above 4%. What has been the reaction by the bond market so far? >> The statement jumped the short end of the curve. And as the tones of Jerome Powell started alleviating some of those concerns we saw on yields coming back in a little bit. But no, just looking at the curve we've seen, yields in general we have seen up more in general at the short and as markets are are starting to believe the Fed when they say they are solely focused on inflation and perhaps the signalling that may be some upward migration and unemployment would not be enough to change their hand. That's coming through and expectations for higher short-term rates. >> There are certain risks to their outlook and inflation. We have the Russia Ukraine conflict. When you think of the other bigger risks to their path on interest rates going forward? >> Certainly seen interest rates in certain sectors of the economy especially in the housing market. We've had a decline in existing home sales. We've seen car sales and anything kind of interest rate related that have been weak. And so I think they will be looking at that. They'll be looking at sort of broad indicators of economic activity. Especially the consumer side of things. Consumer spending has been quite weak. But again, I think they are going to be looking at inflation in terms of the economic risk at any kind of major financial shock might cause them to react a little more slowly. But I think, really, it's going to be inflation where they will be willing to tolerate some economic deterioration in service of getting to their true goal. >> Chairman Powell certainly reiterated that they want to get to that 2% target. Finally, the US dollar has been on a tear recently. The dollar index just had a new 20 year high in the basket of currencies. Where do you see the dollar in US going? >> I think a lot about the Canadian dollar versus the US dollar. I think on that cross, the Canadian economy at least up to date, looks like it's been outperforming. Now I think there are some doubts about whether that can be maintained. But if we were to see some of that continued resilience in the Canadian economy, we might get a little higher Canadian dollar versus the US which is been hit really hard. Of course, I think it will also, the inflation differentials will matter because as much as we've started to see inflation come down a little bit in Canada and then that hurt the loonie because rate hikes with the Bank of Canada were not expected to be as severe. So I would say that I think we will probably see a little more strength in the Canadian dollar over the next little while. I mean it has weakened a whole lot and I don't think that monetary policy and the two countries will be all that different. Both very much committed to bringing inflation to 2%. Against the euro, I think we are in for some continued weakness. I'm not sure the euro will get much weaker from where it is today but certainly there challenges are long-standing in terms of energy and there that I have a hard time going into a recession likely by the end of this year to tighten policy nearly as much as we are seeing on the side of the Atlantic. >> That was James Marple, Senior economist with TD economics. Now let's get you updated on some of the top stories. >> Canadian retail sales are posting the first decline in seven months, driven by a pullback at gas stations and clothing stores. New numbers and today from a stats Canada show a 2.5% decrease in sales for July. That said, an early estimate from stats Canada suggests retail sales may see a modest rise in August. A series of aggressive rate hikes from the Bank of Canada this year of raised concerns with the resilience of the Canadian shopper. Costco beat earnings expectations in its latest quarter despite inflationary pressures. The retailer says it saw strong demand for food and fuel in the quarter. But inflation did take a toll on its gross margins. Costco has been trying to navigate higher costs in both the shipping and labour fronts. Inventory was also elevated compared to the same period last year. FedEx plans to raise its of the average shipping rates by almost 7% in the new year. The announcement comes as the shipping giant grapples with falling demand as global recession fears grow. FedEx says it expects that weakness to continue and is also laying up to $2.7 billion in cost-cutting measures. And here is how the main benchmark index in Canada is trading. We are getting hit pretty hard by the energy trade. On my screen. South of the border, check in the S&P 500. A lot of forces working against that topline number. Down 85 points, that brought her read of the American market. Inflation has remained high in the United States despite repeated supersized rate hikes from the Fed and across, according to Bill Booth, Co-Chief Investment Officer at Epic Investment Partners, markets may have entered a new era where slow growth is the norm. He joined us earlier to discuss. >> Selling often to the close… I think it's now abundantly clear that the Fed's sole mission in life at least at this stage in his life is to kill inflation. The message was pretty much that they will do whatever it takes to get inflation back towards its longer-term target. So I think investors are grappling with this reality that the Fed is willing to sacrifice the economy to some extent. Willing to sacrifice the labour markets and Paul basically said if were going to make a mistake, it's basically going to be keeping rates too high for too long and not making the mistake about pivoting early. So I think that's really what's starting to settle in here. as we have a higher for longer situation. >> When we go back to Jackson Hole, we just throw that out the door. And now this really cold water idea that I guess the last refuge for investors was "I have to get inflation under control but once we get there and won't take too long" they seem to really want to throw that out the door as well. >> Yes, I think they are really concerned about inflation expectations becoming embedded into the psyche of the American consumer. It so it's clear. Inflation is top of mind. I don't think you're gonna stop anytime soon. In fact the big surprise yesterday with the terminal rate is now sitting somewhere around 4.6% in 2023. So, you mentioned at the top that tech is really feeling some of the brunt of this. It makes sense because the first impact of rising interest rates, of course, is on valuation multiples and in some highflying tech stocks that have enjoyed multiples. Really during this last decade of quantitative easing. The regime is now shifting. They are bearing the brunt of the valuation and that worsening of the market. >> Let's talk Bill about that regime shift. I was on the Epic Investment Partners website the other day. Your shop published in the Summer… We have grown accustomed to a certain regime for the past decade. If I was reading the paper correctly, it was basically saying "the decade is behind us is behind us and we are entering a new kind of decade". What does that look like for investors? >> First and foremost, it's just higher levels of inflation. So, certainly we have gone through a decade of modest inflation fairly decent economic growth… And I think as we look to the longer term of inflation. … It will probably be higher than we've been accustomed to. I'm not saying it's can be five or 6% of maybe 3% being the new 2%, if you will. And certainly from an economic growth perspective, there is lots of issues that are weighing on potential growth and economies around the world. Certainly demographics. We have an aging population. That will naturally slow growth in the wake of all the supply chain issues associated with COVID and then the Russia Ukraine situation… We've probably started a new era of de-globalization and the benefit of de-globalization is the supply chains become more reliable. They will certainly become more costly. So I think as we look forward, growth is probably going to be lower than we've experienced over the last decade. Probably higher. >> For investors in that climate, looking for yield, where they start to look now? We have to say that their mindset? There was a period there when you were rolling with the tech stocks. If you made a lot of money with that space, you're getting your share of the big run-up. Where do we look for our returns going forward? >> I think if you look at the last decade, what's interesting is when you look at the components of equity returns, you sort of have valuation multiples go up and down. We have earnings growth and we have dividends. And what's been interesting is valuation expansion has been in big rather a big driver of these returns over the last decade. And now I think you have to go back to notice the other two components of earnings growth and dividends really, to generate the bulk of your returns and equity markets going forward. So for us, that would basically mean "look for those companies that are selling products and services into structurally growing and markets. Companies that, you know, exposed to long runways of growth in companies that are profitable. I know a lot of the unprofitable tech, so-called story stocks were investor favourites over the last several years. I think that game is largely over. At the end of the day, when you're buying a stock, you're actually buying a business. Sometimes people forget that. They see a ticker and a price and they forget there is a real business there. We need to focus on companies that are profitable, cash generating and really have strong balance sheets. I think the other feature of this new era, new regime, is probably a heightened volatility and uncertainty. The world order seems to be falling apart. We have geopolitical issues left and right. We have this energy crisis with Europe at the centre of it. I think just the range of outcomes going forward is probably also wider then what we may be accustomed to over the last decade. >> Two qualities that I have. Trying to have rather. We need to be patient and we need to try to take some emotion out of it. I have been surprised by myself lately about my lack of patience and my excessive emotion. I'm assuming that the path we are laying out going forward, we will have to get a little more discipline with ourselves. > I think so. It's really the force of the trees argument. If you think of what's happened in the markets today, there are areas that have potentially very attractive long-term growth prospects. If we talk about green energy or automation or just technology more generally… Obviously I think that technology is really fuelling a new industrial revolution. Everything from the Internet of things to the cloud to big data… If you take a step back from the day-to-day volatility, you kind of thing to yourself and say "has any that really changed?" In 10 years from now we will have more semiconductors or less? If you can, to your point, be patient, some of the selloffs names are an opportunity. One of the arguments I heard through the better part of the bull market is "everything is so expensive and I miss the stock and I miss that stock". Perhaps investors are getting a second bite of the Apple. Understanding that there may be more pain to come in the short term. But if you do the fundamental research and analysis and have conviction in some of these companies, the end markets that they are selling into, sometimes you can actually get quite excited with lots of people being fearful. >> That was Bill Booth, Co-Chief Investment Officer at Epic Investment Partners. Now let's get to our educational segment of the day. If there is an investment you'd like to make, there are different types of orders you can use to better suit your needs. Including market or limit orders. Joining us for more is Jason Hnatyk, Client Education Instructor at TD Direct Investing. So Jason what are some of the deciding factors when trying to choose between market and limit orders? >> It is nice to have choice. There are many different archetypes you can use. Today we can focus on to the more commonly used order types and that is market and limit. But before we talk about the orders themselves, let's first at the table by discussing some of the basics of the stock quote. So here on my screen, we are looking at just a summary quote of a particular ETF. Now we can clearly see at the top of the screen, we have the last trade and the change for the day. Now keeping in mind that change is quite down today. But other days it will be up. That is just referring to the relationship from the current last trade in the closing price from the previous trading day. That is one key distinction to know what the last trade: it is a historical quote as well. It's in the history that already happened. So understand where the market is trading at right now. We need to be focusing on where the buyers and sellers are, where they are meeting at currently. That is represented by the bid and the ask. The bid is representing the highest bid to buy so that's the buyers. And then we have the asking price. Those are the folks that are looking to sell right now. This is the lowest offer to sell at the present point in time. Now, before we talk orders, again, let's talk about some quick factors that you may consider before you choose a particular order type that is going to suit you best. What's more important to you? Is that going to be the speed of your execution or the price? How volatile is the market? Is the stock moving fast or in a particular direction? Or is it very choppy? Is there a lot of volume on the stock? Is there enough trading going on in the particular stock to support the size of trade that you're making your account? And maybe the other thing to consider it would be "is the market open at this particular time?" Let's go back and take a look and discuss the market in a limit order. So we can understand the key differences between them. And if additional situation we will say we are going to buy something at the market. So that would mean that we would be the bidder. In line with the bidders. In the market orders we need understand who we are buying from. That would be the folks from the asking price. The key distinction to is that you were saying "I'm willing to spend whatever the market is willing to sell me my shares for. My main concern is speed of execution. I'm less concerned about the exact price that them to pay for my shares. Just by my shares or whatever current prices." You take a look at the asking price, you can expect to be filled around that price. But there's no price guarantee with the market order because as we know the market is not static. He continues to move. It moves up, it moves down, that may affect the price which you market orders billed at. So the benefits of speed and being filled right away, but the con of the trait is you don't know exactly what you're to be buying and selling for because the market is ever moving. Quickly talking a limit orders. This is the other side of the coin. If you get well you do get price control. You can say "this is the most are willing to buy for this is the least and willing to sell my stock for." So you do get a guarantee on price. But the con of the trait is we can't guarantee you in execution. Let's say the asking price is 366 and change. If I'm willing to only buy and I put my limit price of 365, will I will be executing this because nobody is selling the price of this particular ETF at that price. So once again, guaranteed price, no guaranteed execution. So they both have pros and cons. You need to choose what order will be right for you. >> Very interesting stuff. Now we learn of the order, can you walk us through you actually place when I WebBroker? >> Absolutely. That happens to be the easier part. Within WebBroker you can do that in many different places. You can either go up to the trading tab and you got your "buy and sell" options on the left. Alternatively, you have that quick button at the top that will get you right into the order with the arrows. I like to use these buy/sell buttons on the quote because it will refill the symbol of the stock just to help speed things up. We can go ahead and enter our quantity. You'll also notice that our quote is appearing on the right hand side. WebBroker is real-time. Keep in mind if you spend time debating "should I or shouldn't I". You want to make sure that you go ahead and refresh so nothing drastic is happening while you've been in that deliberation phase. To choose between market and order, market limit, I should say, this is where we have our price tag with all sorts of different other order types. Will have an opportunity to talk about that at a later date. Market and limit are chosen at the top of the drop down. Limit price: this is real have one extra step to take into play here. This is why, in this case I'm buying. So I'm putting in the most and willing to pay. Let's family willing to pay this amount. $365. The last piece of information we need to be concerned about the order types, if are choosing market for the order would like to do, your time in force will always be day. Because we know that market orders are executed when they are received by the market. Even if you're doing a market order in the market itself is arty close, it still will be from today but the order will get executed the next business day whenever it happens to open. With a limit order, we do get additional choices and in the other section you can either choose day. You can specify the date and you also of the opportunity to choose "good till cancel". Your order would be open for 180 days. And you can just go ahead and preview the order, send it through and hopefully get a good trade. >> Great stuff as always. Jason really appreciate that. >> Thanks so much. >> Jason Hnatyk, Client Education Instructor at TD Direct Investing. Make sure to tune into WebBroker for upcoming events like webinars and master classes. It's been a busy week has in it? The CPI report showed that inflation is cool but it may not be enough to slow the Bank of Canada's rate hiking path. I spoke with Michael O'Brien, Portfolio Manager at TD Asset Management to discuss. >> I don't think it has a big impact on the next decision or two. I think the Bank of Canada is pretty locked into what they want to do in the next meeting or so. But it's clearly a step in the right direction. No question about it. I think everybody realizes that we need to see inflation come down so central banks can back off. We probably need the central banks to back off before equities as an asset class start to move significantly higher. And so the fact that we have now had a couple of months in a row where inflationary pressures seem to be peeking, if not backing off to too much, let's take the wins we can get them. This is a good news report. >> We take the wins we can get them. Eventually down the road with that means for our equity portfolios, after the Summer rally, it's been a tough go again. As we said, the Fed is on deck for tomorrow. Depend on how tough Jerome Powell wants to speak to us. What's your opinion on that? Is he to speak to us? We had that Summer rally and then you have Jackson Hole. We had some stern words. He seems to be taking it to heart finally. >> Will I think that's exactly it. If you think back to earlier in the Summer, pre-Jackson Hole, I thought the FOMC, the Fed committee had been pretty clear about what they wanted to accomplish. They wanted to move fast. Quickly. Sort of the front loading of the policy rate hikes, the same playbook as the Bank of Canada. They communicated that they want to get up to a level to slow inflation and slow growth. Then we want to hold them there for a while and see what happens. If you go back to July, there was a lot of enthusiasm about a so-called, fed pivot. Which is to say the Fed was on the verge of backing off. Clearly that was not all the intention. So Jackson Hole was really Chairman Powell setting the street straight and sang "no no no that's not what we are talking about. Rates will be here for a while. " And I think that was a wake-up call back then. I think more and more people, as the weeks have gone by since Jackson Hole,more and more people are getting the message that rates are to go higher from here and they will stay there. That is the disconnect that the FOMC was probably troubled by in the Summer. Most of the forecasters had rates going up to 375, four, 425… Which is a realistic landing point for the Fed policy rate. but then they had these interest-rate cuts coming into the second and third quarter. I don't think that's what they want to communicate. I think most people are ona more realistic plan right now is the FOMC's I would not expect the same magnitude of surprise coming out of tomorrow's decision. But at the same time, I don't think we should be under any illusion that they have viewed their job is being done. There is more work to do here. >> They said they would be paying as well. So we take it back to the health of our portfolios. We do know the central bank, are trying to tame inflation. In that pursuit,of course the big concern as they go too far. And we don't have a gentle recession. One that won't hurt as much. That doesn't sound like a great time for equities if they can't sort of land that soft landing. >>No, and obviously, we've been seeing that reflected in the broader market action for several months now, right? We've got to be realistic. This is a difficult environment for equities as an asset class. By that, I mean if central banks are tightening pretty much in unison across the planet with the possible exception of China and Japan, everybody else is tightening policy rates. Growth is slowing because it needs to. Inflation is enemy number one, like I say, not just here in North America but across the planet. That is, generally, a difficult time for equities as an asset class to shine. It doesn't mean there aren't opportunities in the market. It doesn't mean that some stocks don't present opportunities, and it also doesn't mean that were going to be in this state forever. What it means to me as we just have to be a little patient here. Better days will come but in order to get to that point, we do need the central banks to stop raising rates. And the only way the central banks are going to stop raising rates is if they collectively see inflation beginning to come down not just in a one-off, not just one good report but on a consistent basis across a broad spectrum of measures. And so, like I said at the beginning, this was a nice outcome for the Canadian CPI report today. Because not only did you see the headline number come down, and not only is it down nicely on the month, it's also down over a percent from June. So we're making progress. But more than that, it's sort of beneath just the energy shock and, OK, gasoline prices were up, gasoline prices were down. The broader core measures of CPI in Canada actually trended in the right direction this month. And so I think what we need to see to get really more constructive on the market as a whole is, we need a few more prints like this, where the core measures, the broad swath of incoming price data is indicating that the worst is behind us. Because that's what the central bankers need to see to back off. once the central bankers feel that they've done enough and can communicate to the markets the policy rates probably aren't going up a lot more, I think that soon we get more constructive, sort of the all in on equities trade. But that is in today. We still have a ways to get there. >> You mentioned patients right? ? Is that going to be the hardest bit of discipline here for investors? I feel like we've gone through a long period where we didn't have to be patient, where were the Fed or someone else would meet our needs if we weren't happy with the state of things. And now, we're just being told, listen, it's a long road, and we're not going to run to the rescue. Patience seems to be-- I should have it at my age, and I feel like I don't have patience for anything more anymore. >> Who does? >> Yeah. >>No, I think you hit on a really important point, which is, this is a different environment than most of us have gotten used to over the last decade. Over the last decade, the issue was that central bankers couldn't get enough inflation. They kept undershooting the policy targets. And so because of that, every time it seemed like growth would waver, like you said, or there was trouble on the horizon, something happened, something broke, the central banks were very quick to come in and fix it. Because what they were fighting was inflation that was undershooting the target. So that's why the Fed was always our friend through that whole period. You hear the reference to the Fed Put. In other words, the Fed's going to save the day. And they pretty much did for the better part of 10 or 15 years, I guess, going back to 2009. This is a very different environment. Right now-- so that was an alignment of interest. Investors and policymakers both had the same interests, which was to protect growth so that inflation could get back to target. now, there is those two parties that are no longer aligned. . Investors don't want the same thing as the central bank wants. The central bank wants slower growth and higher rates, less inflation. We tend to want lower rates and higher growth. [LAUGHS] We're no longer on the same team. And so when you get this divergence, when they're no longer aligned, that old maxim, don't fight the Fed, tends to carry the day. It's the central bankers that will prevail in this battle. And so to your point, that's why we have to just be patient and let this process play out. >> That was Michael O'Brien, Portfolio Manager at TD Asset Management, clearly Michael and I had that discussion before the Fed decision on Wednesday. But I think if you listen to what Michael said there, it played out the way we thought it would. In terms of the hike, the magnitude itself and the pretty tough talk we continue to get from our central banks. So on that note, let's turn to the markets right now. This is a very tough way to end the trading week. it's been a tough month all through September. … The TSX Composite Index more than 3%, it's pretty tough across all sectors. The big three are leading us, we have West Texas intermediate crude, that's a pullback on more than 6%. Suncor, off the top of the show, we could really show you any of these names. Bay tax at five bucks and $0.91 a share, down 8 1/2%. Trying to find some spots of green, some positive activity. This was my pick. It was a very small group to pick from. Dollarama now giving up some of its modest gains of the session. Modestly negative, 7639, couldn't hold onto that positive showing earlier in the day. But it's modest in this space. You think of tough economic times, names like Dollarama, the other dollar stores have been seeing people from across all income points of the spectrum looking for deals in the story in the face of soaring inflation. Let's check the S&P 500 right now south of the border, you're talking about that 92 point deficit. We will round that out. The tech heavy NASDAQ… It was not faring quite as poorly. Down 2% right now. Not quite as much is the broader market. Let's check on one of the big Wall Street banks and see how this environment is playing on that trade. Right now in 107 bucks and change. J.P. Morgan Chase down 3 1/2%. >> As we Canadians continue to whether high inflation, rising borrowing costs and growing fears of a recession, it's forcing many consumers to spend more cautiously. For more on the latest retail sales data, Anthony Okolie joins us now. >> TD economics points to significant deceleration in consumer spending in the second half of the year. Again, this comes after TransCanada reported retail sales falling by sizable 2.5% month over month in July. Parliamentary estimates for that drop, much higher-than-expected. Core sales now, that's going to exclude the volatile auto and gas sector, down. Again we dig into the numbers, about the weakness in July was due to a drop in sales. Down a whopping 14%. Consumers also continue to cut back on driving. Less gas is pricing fell. They also bought less of everything else. With core sales down an inflation-adjusted terms. Now consumer demand also cooled as I mentioned. Housing related categories felt some pain alongside the slow down in the real estate market. Things like furniture and home furnishing stores, electronics and soup and appliances, building garden equipment and supplies all fell during the month. TD economics also noted that some headline growth was from a drop in auto sales which accounts for about one quarter of retail sales. Now, even e-commerce sales pullback in July. But there is still up more than 4% versus a year ago. All in all, TD economics has been in the headwinds of higher inflation, higher interest rates as well as a drop in wealth. Causing consumers to become more frugal. Greg? > Now these are the numbers from the Summer. An early glimpse of August. How is TD economics feeling about our willingness as Canadian households to spend into 2023? >> TD economics expects a rotation of durable goods into other services. Like recreation and entertainment. They expected to weigh on consumers spending to the third 1:45 thousand 22. Again, as we see this behavioural shift, I brought a chart along with me. You can see the forecast by TD economics. A sizable drop in durable goods demand. This year, 2023, you also expect to see overall spending fall in 2022 and decelerate further into 2023. >> Interesting times and teed. Thanks for that Anthony. >> My pleasure. > MoneyTalk Live's Anthony Okolie. Stay tuned Monday, Juliana Faircloth Industrials Analyst with TD Asset Management will be taking your questions about industrial stocks so that rails, defence and shipping firms like FedEx. And a reminder that you get a head start with your questions, just email MoneyTalklive@td.com That's all for our show today. Thanks for watching take care and we will see you Monday. [music]