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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 show: We'll hear from Michael Craig, Head of Asset Allocation atTD Asset Management with his take on the recent spike in market volatility. Juliana Faircloth will take us through whether the onshoring trend could lead to more inflation. And TD Securities' Greg Barnes will explain why a supercycle could be shaping up in the commodity sector long term. Plus in today's WebBroker education segment, Bryan Rogers will show us how you can screen for technical events using the platform. But before we get to all that let's get you an update on the markets. But before we get to all that let's get you an update on the markets. Yesterday's rally was clearly short-lived. Quite a sharp reversal. We have a 212 point deficit on Bay Street for the TSX Composite Index. That's good for a pullback of more than 1%. All the sectors in the red on my screen. Tech is on the downside. Let's check in one of the big names that we have on the index here which is Shopify. Right now, down more than 6%. We saw a boost in energy shares yesterday as we have a balance in price and crude, giving so that back today as Bay Techs energy with five bucks and $0.79 a share, down about 2.7%. South of the border, let's check on a broader read of the American market, the S&P 500 again giving back yesterday's gains right now down 1.7% or 63 points. The tech heavy NASDAQ, let's see how it's fearing in this environment… Poor. Down to the tune of almost 3% right now. A big part of that story is the weakness today pretty broad-based in terms of the selling with Apple. Check out the behemoth here for the second day in a row underwater now. More than 4%. That's a market update. MoneyTalk's Anthony Okolie joins us now with more on what's happening in the markets now. What a week. What action with the rally that we were enjoying yesterday. And the quick reversal. >> Yeah and I think the big news of course was the Bank of England. Buying longer-term bonds in order to stabilize the markets. Also postponing the sale for a couple of weeks. I think what you are seeing in England right now is this tension between the government where they have the loose fiscal policy in the central bank which is raising interest rates to control inflation and these concerns that the policies that the government is putting through, those funded tax cuts, it's actually inflationary. So this fear that the Bank of England actually has to hike interest rates even further in order to control inflation because of the fiscal policy put up by the government. >> Such a complex story in such a complex interplay between fiscal policy and monetary policy. Literarily was not what we expected to be in the playbook. In the morning there was a tweet from an economist on the street talking about quarters… The Bank of England buying bonds, it seemed to change for one day. That was yesterday. Some psychology in the market, you saw yields fall, you saw the US dollar give a bit of a pause with the decline and then we saw oil go up and gold go up in the markets go up. A few fed speakers, apparently coming out today and saying you know, trying to pour cold water that investors had in their head that "the Bank of England did this… There seems a concerted effort for fed speakers to say they still need to tame inflation." >> We saw the Bank of England coming out and loosening policy. There might've been some hope that perhaps other central banks would fall in line. But as you heard, the Fed is focused on fighting inflation. Which is a four decade high. They are not looking to pivot to loosening policy and they are going to move forward until they can bring inflation down to a target of 2%. >> Also pretty curious about yesterday's rally, even though Apple came under some pressure on these reports that perhaps the need to ramp up or rather they do not need to ramp up their iPhone production for the number 14 as demand is not a strong heading into the holiday season, we still had them finish in positive territory. Now the story today, the broader market is down and Apple is down. >> This is not the first time we've heard a big bellwether warning about this consumer effect. They warned of weakened global demand. It's just a reflection of the global economy in general and with quarterly earnings coming out, we will soon get a better picture of how companies have been managing their balance sheets over these last couple of months. >> Of course in the end it is all about that dreaded R word: recession. It'll be hard to escape one. I guess the scope of it seems to be the point of contention, the point of debate among economists. >> Exactly. Whether a soft landing or hard landing, I think there is a debate going on right now. But certainly, it's coming more and more to focus as the central banks continue to hike aggressively. It seems to be sort of filtering in the markets that potentially we will see some or recession. How strong it is : we will have to wait and see. >> Volatile times indeed. Thanks for that Anthony. >> My pleasure. >> MoneyTalk's Anthony Okolie will join us later in the show. With the effect that rising rates are having in this country. Earlier, we heard from Michael Craig, head of TD Asset Management and allocation on how he views this current volatility. Let's listen. >> Is a really challenging background right now. It comes down but probably not as much as they probably need to. for investors thinking of what they are trying to achieve now, the thought process is now that the bonds are well entrenched. Bonds at very high levels that can break an economy into a recession. So that area is a bit more interesting than the price of markets. >> Of course people always want a crystal ball to tell them exactly when they make their move. . We know we can't time the market with any great efficiency whatsoever. Is it one of those scenarios where while things look interesting, things could still be tough for a little while? >>- So for 12 years, we've almost had this Pavlovian response in markets, where you had easier-- every time we had these bouts of volatility, we've had easier policy pushing the cost of money, quantitative easing, et cetera. And so the reaction of a lot of investors is to buy the dip. I would be very cautious with that, in a sense that that combination is not likely to come any time soon. And so you are buying into what likely will be a recession. And so I would urge patience. I don't think people are always worried about missing it. I think a bit of patience probably makes some sense, as this bear market that we're in, and we are now technically in a bear market, will likely be one that's defined more by time than by the speed of the sell off, right? So we're probably for a longer period of a bear market than what we've really experienced in for a long, long period of time. >> Of course, in the summer, when we had that rally, it seemed to be a bit of doubt among investors that the Fed was serious. And then, Jackson Hole seemed to change that, and say, well, you know Jerome Powell actually is serious about all this. At some point, is there an argument to be made that the Fed gets the job done? And then, eventually, there'll be rate cuts. I mean, investors-- that seemed to be the hope that was being clung to in the summer that just got sort of thrown there with Jackson Hole? >> It will happen but I think it's too early. they moved from being kind of a forward-looking central bank, to really be targeting measures that and to be lagging. Which is a bit tricky. which is a bit tricky. Because forward looking measures of inflation have rolled prices paid, producer price indices are coming off. You're seeing a lot of the transportation measures start to roll as consumption-- people are consuming less, right? Rate hikes have an effect on people's behavior. But it will take some time to show up in CPI numbers. So I would say just be patient, like the summer rally was on Fed misspeaking, talking about Fed funds being at neutral levels, which they weren't. I don't think that's what Powell meant, but that's what investors took. And then, you had a lot of technical analysis saying, oh, we were at these critical levels. Historically says, every time we got there, the bear markets over. And that was really only half the story. And so people started buying the narrative in the market. And I think people are-- it's the narratives that can kind of push you different ways, and it's usually what's the cause of bear market rallies. But I would wait for a bit more of a wash out, kind of, real economy, before you get kind of excited about really pushing back into equity. >> Could there be more bear traps awaiting us as we work our way through this? >> So sometimes, it's this profession, mentally. You feel like you're a bit of a kite in the storm, if you will. And so, I was actually just looking at the… Not to say this is the same, but to look at a previous bear market, I went to the 2007, 2009 experience. Within that bear market, there were a number of rallies double digit. 15%, 25% rallies before. You ultimately at the bottom. And I think you have to be very disciplined when you are looking for that. You've seen the policy shift. And you start to see where the inflation inflation is on a to handle. And you're getting a feel that the central banks are really looking to ease policy again. You'll see it in the bond market. It will start to steepen as the front end starts to rally. None of those things are happening yet, right? So again, I would say that rallies at this point forward, with nothing else changing, are bear traps. >> All right. So that's a good piece of information to take in the conversation. What is happening in Britain right now? We have a new prime minister. Pretty violent reaction to some of the plans that they have. This is the G-7 nation… Do we need to be concerned in North America about what effect it could have on our markets? Or is it sort of a British problem at the moment question mark >> This is a, I actually think that, historically we will look back at this. As one of those moments where the markets went on a completely different kind of direction. … Then what had previously been understood. What I mean by that is the UK move forward with the tax cuts by borrowing. There is an ideology that smaller government, lower taxes. Okay. But to pay for tax cuts you usually shrink services. But to pay for tax cuts, usually you shrink services. And there's an ideology where we increase taxes, and increase services, maybe only the sides. But to go and cut taxes, and then say, we're going to finance it with debt at 4%, and think that you're going to be able to spur growth, is a very risky strategy. And what you saw was that you can't do that anymore, because the marginal buyer of your bonds is not the central bank, it's investors. And investors are saying, nuh-uh, right? So, and if you think about it-- So for a household making $200,000, these tax cuts are about a 4 and 1/2 thousand dollar savings. Well, Sterling's off 7% since it's announced. So you've already-- that household in terms of goods they buy, US goods, they've already just lost $14,000. And borrowing rates are up about 70 basis points, to 80 basis points. So epic fail. And I think it's a warning to other finance ministers. It's something you haven't really been able, haven't really had to worry about for years now and I think we have to start prioritizing and think about needs and wants and focus on those needs. Because there is, the cost of money is materially higher than a year ago. >> And I mean, what we are living through right now, from 2022 alone, the greater context is the pandemic, the massive dislocations that we had in all sectors of the markets. It seems like we will have to be living with this hangover for a very long time. >> Yeah. I mean now, we are going through longer-term indications of COVID. Long COVID. And even now we just had a recent bit of a surge here in Ontario. . And you have absenteeism shortage, a shortage of labor, and an epic, an amazing amount of those 55 and over leaving the workforce. So we do have true labor shortages. And so we're still living with that. My sense is though, that the behavior during the pandemic of excessive consumption, is now about to reverse. And that all, what we're talking about today, with supply chain challenges, and goods consumption, is about to reverse across the board. in many ways will would be weird where you have these high borrowing costs but I think prices of some goods are about to come down as retailers start discounting excessive inventories but this is a really good story that was going to kind of unfold over the next couple of quarters we believe. >> I was Michael Craig, head of allocation at TD Asset Management. And now top news stories. The Canadian economy is showing signs of fatigue as central banks continue to aggressively boost borrowing costs. An early estimate from StatsCan suggests the economy stalled in August following a modest tick higher in July. The agency says growth was held back last month by declines in manufacturing and the oil and gas sector. Anthony Okolie will join us with more on this story later on in the program. Pipeline giant Enbridge is making an acquisition in the renewable energy space. The Calgary-based company is buying US wind power developer TGE in a deal valued at $270 million US including debt. Enbridge CEO Al Monaco says TGE has a significant development program. struggling retailer Bed Bath & Beyond is booking a larger than expected loss for its most recent quarter. The company is attempting a turnaround after shaking up its management ranks. On that front, Bed Bath & Beyond says it's making progress in clearing excessive inventory. And it expects cash flow to breakeven by the fourth quarter. Right now Bed Bath & Beyond is down a little more than 5%. A quick check on the headline on both sides of the border. We will start with the TSX here in Toronto on Bay Street. Down to the tune of more than a percent. 210 points to the downside, seeing weakness in the tech name. Leading the way to the downside at this hour. And in the United States,… 66 point deficit for that brought a reader the American market. Global supply chains came under enormous strain during the pandemic of course pouring a push towards bringing production back to North America. But what impact will onshoring have on the industrial stocks and the cost of goods for consumers? Juliana Faircloth, Industrials Analyst with TD Asset Management join me earlier to discuss. >> When we talk about onshoring or reassuring, or near shoring… A bunch of different terms to capture the same phenomenon, which is reestablishing supply chains domestically or geographically closer to the end customer, so mostly North America, we can think about it as the opposite of globalization. Where, many companies outsource production to low-cost jurisdictions, China, Vietnam… Those are common destinations. So a reversal of that is what we think about is onshoring. >> We heard the term thrown around during the pandemic in terms of how it was it is an idea to have these key components and so many things we need made overseas. Is there actual momentum towards onshoring? Are we seeing this is a real thing is developing in the market? >> Yeah. So there are a few drivers that play going into this onshoring theme. That make it quite topical. The first one of course was the pandemic, as you mention. Whether it was automakers unable to find supplies, Or infant formula shortages that we had towards the spring and all the noise. This is all strain in the global supply chain and some challenges there. Onshoring, I think would be one way to manage through some of that and build a bit more resilience into supply chains. The second driver is really geopolitical. As we know, there is rising tensions in Europe. This rising tensions between China and the US. And companies are now realizing that overreliance on certain jurisdictions can perhaps be detrimental to their business. And then the third reason that I think is important for investors to consider this theme is that companies are telling us they are thinking about it. The number of times that management teams have used the phrase "supply chain ", onshoring are reassuring in their conference calls in the last couple of quarters is where it skyrocketed. So it's top of mind for management teams and should be considered by investors as well. >> This obviously would be a big shift of what we got used to in terms of how supply chains of work. clearly will mean change in change can be good or bad. Onshoring… What are some of the benefits for the North American ecosystem? >> Their three benefits I would point to the first what is of course supply chain resilience. If your supply chain is more domestically or regionally located, perhaps you are more insulated from external shocks like changes in international trade policy, geopolitical flareups, you are somewhat sheltered from some of those challenges. The second benefit, and I think why there is often political support for onshoring, is there is a potential benefit to local economies. There is a bit of a multiplier effect is onshoring. It helps to create jobs. It includes rather improves the tax base perhaps drives innovation is research and development function are more localized and centralized. And the last benefit would be lower transportation costs. This was very topical a few months ago. When ocean freight rates had really spiked dramatically. They have normalized somewhat since then. So less of a transportation arbitrage with the onshoring theme. But to the extent that companies are more more concerned about emissions throughout their entire supply chain, travelling lower distances certainly helps from that admission perspective as well. >> Their ESG goals sort of laid out at the corporate level… Supposedly the benefits of onshoring. Would there be drawbacks? >> Sure. There be natural drawbacks as well. The first one to point it would be perhaps a lack of labour availability. It might make it difficult to implement an onshore strategy. We know the US labour market is very tight. So finding skilled workers to work manufacturing jobs could be a bit of a challenge. Secondly, it's an expensive undertaking. Onshoring will require capital investment. It is probably a higher operating cost undertaking, given you are moving now from a lower-cost jurisdiction to a higher cost of jurisdiction. And then related to that is that this has the potential to be another driver of inflation over the medium to long term. If supply chains become more regionalized onshore and production costs are higher, some of that gets passed on to the consumer through higher prices. So, it certainly doesn't go in the favour of policymakers trying to battle inflation today. >> I've often thought about how there's probably a very simple way of thinking about it with if you don't of the global supply chain phenomenon that we saw in the past several decades, you might not have three TVs in your house. Let's say that expensive is something the company won't pass through through us. >> Exactly. >> What ways you play that is an investor then, in terms of different industries? Obviously we are talking industrials today. Would they be the largest beneficiaries question mark >> So certainly the industrial space would be a beneficiary of this type of trend. We really boil it down to what is going to be the impact of onshoring, it's going to mean higher capital expenditures, higher investment in industrial production and industrial infrastructure. And that is supported for industrial companies organic sales growth. So there is a few pockets worth highlighting within industrials that could stand to benefit from this trend. The first would be machinery as manufacturing facilities are built and constructed, companies with exposure to construction spending should benefit. Companies like Caterpillar for example. Then moving on to multi-industrials, this is a broad group of companies and they spanned many different and markets. Many of which stand to benefit from an onshoring trend. So if I think for example, about electrical equipping companies, a company like Eaton in the US is well-positioned. They provide electrical equipment for manufacturing facilities. A company like Honeywell has industrial software business. That stands to benefit. And then there is automation players like Rockwell automation or Schneider in Europe that are exposed to the theme of industrial automation. They sell automation software. They sell robots to factories. So particularly if wages remain elevated, that could be an area that stands to benefit. And the last area, which is less direct, but probably stands to benefit as well would be the rails. The North American rails. If a greater amount of industrial production is brought back to North America, that's positive for rail volumes as they transport raw materials, they transport finished goods. So generally a tailwind there for the rails. I would say this will be a slow-moving train, companies are not… >> I want to ask you about duration. To look at the trend a longer term and be patient as we work our way towards the trend. >> Exactly. So companies today are not upending their whole supply chain and reconfiguring it in the next six months. That's not really what is excited to happen. But the incremental investment incapacity or as companies decide to come perhaps bring more resilience into the supply chain, we may see some of those funds flow onshore which will be a nice tailwind with the industrial space over the medium term. >> That was Juliana Faircloth, Industrials Analyst with TD Asset Management. A quick check in on the markets now. We are giving back the gains of yesterday's short-lived rally at 18,000, 404 down 244 points. The TSX Composite Index, one 1/3% pullback. We are seeing weakness pretty much across the sectors, notably in some tech stocks and some energy stocks. Let's check in on MEG Energy. Down 2 1/2%. We noticed a bit of strength. Some modest names in gold. Still hanging in there, up to and 1/2%. There are pockets of green in this market today. South of the border, check in the S&P 500. Of course as we discussed with Anthony Okolie at the top of the show, the Bank of England may have shocked everyone by saying they have to have a bit of on buying, we had some fed speakers coming out saying "don't change your mind about the couple of the type of course we are on at the reserve… We are hiking and we are tightening inflation. ". The S&P 500 that brought her read the American market down 2%. The tech heavy NASDAQ taking it a bit harder today down to Naprosyn for now. We talked of the plot problems in Apple that they are facing right now. The demand for iPhone 214 in the face of a slowing economy is not going well. Facebook down 3 1/3%. Now let's get to educational segment of the day. Technical analysis is one method investors can use to analyse what's happening in the markets and WebBroker has tools which can help you. Joining us now to discuss is Bryan Rogers, Senior Client Education Instructor at TD Direct Investing. Always great to see O'Brien. Walk us through the tools on how WebBroker can help us analyse what's happening out there. >> Alright Greg. Absolutely. We have looked before on WebBroker at the screen or tool that has a lot of great features you can look at a special for fundamental analysis. You can combine other things like technical analysis as well. But I think a lot of the short-term traders like to see the ability to look at shorter-term trends and the ability to just screen for technical analysis on its own. And that something that is possible and WebBroker. There is a technical screener. So we take a look at the screen on WebBroker here. You can see that, if we jump into "research". It seems like as always we are going into research and we will go into the "technicals". That will take you to this screen where you can see different events and so on. We won't look at today. We looked at this before. This is the actual technical tabs itself. On the left-hand side, this is the hamburger menu, these three vertical rather horizontal lines. Click on that and you can go directly to a screener tool. At that point, you can now use the drop down as a scroll down a bit here you can use the drop down if you're looking at more Canadian opportunities, if you see the drop down there some different Securities exchange in Canada and in the US as well. You have the New York Stock Exchange and the NASDAQ. Even as Canada at the moment, just to show you a quick example… The other option you will be able to screen for our things on this list. Typically such factors as if there is a certain long-term downtrend or uptrend. Are you looking for the most liquid stocks as an example? You can even further narrow this down here. Then I scroll down and you can see a few more, related to either volume or other indexes. There is volume leaders etc. So you will select one of those. You can actually leave that blank as well and just click "none". It doesn't mean you want to have it go across everything possible at this point. Because you can now filter even further. For example by industry. I'm going to choose, just for fun, I know we were talking about this on oil and gas industry. That's something the people in Canada I think are watching pretty closely. So if you could oil and gas… You want to see opportunities. You notice on the right-hand side, these popped up right away. You might get a large list that way. Would you can actually select and look for bullish or bearish opportunities. If you're looking for bullish opportunities, these are ones identified by the provider of the screen. They will tell you here's international petroleum core, here's crew energy. Then you can click on these and see the actual technical event identified. There is the date. You can click on these to see more. And then from there you can look at even more filters when you actually get into the event itself. So I know we talked about this in the past but this will be something… We don't have time today but you can see that you can actually see some more education with the event is telling you. Down to the very bottom. There is a resistance and support level that they give you. So a lot of great information to get started with from a technical screen perspective. >> I have made screens like this in the past Bryan and I move on to something else the platform and I think "it would've been nice and I can go back to that". We can save the screens right? For future reference? >> Yes I thought you were going to say save it for a rainy day maybe. >> Ha ha ha. >> I will create another one for say like, a US exchange. If we jump back into WebBroker under research and then technicals again, we will start over just so everyone knows we are going. So research and technicals: then I'll go to the left of the screen again. Like Greg was saying, once you've created your screen and think you don't want to keep doing this over and over again and you want to have it available next time, start off here let's say looking on the NASDAQ and I want to look here and maybe I'm looking for some volume, some high-volume. Leaders as an example. Volume leaders… NASDAQ is when you can select. Maybe you are looking for a certain sector. I'm going to use semiconductors because I know that's one that's been in the news quite a bit lately. So if we scroll down, there are semiconductors and then remember, sometimes may not get much in your filter so you may actually have to rework your filter to see what you're getting at. Let's they were looking at "bullish". We have 17 matches here. You have some microchip technology. What you want to do, the thing to be able to save this issue going to actually click on "subscribe". This is the part that kind of threw me off and never started using the screener jewel. You're looking to see "save"… How I set this up and save it for later… The way they do is they click on "subscribe" and then you see this note that comes up. If you're already subscribed for updates on certain filter criteria. It says high-volume semiconductors NASDAQ : it will say this is the alert centre to managers assertions. So usually a lot of times will name it for you. If not it will ask you to name it but otherwise it can go in the alert centre. And there it is. It's right there as my screen for later on. And then after that I can screen to heal my heart's content. >> Screen to your heart's content read I like that one. Thanks Bryan. >> Thanks Greg. >> Bryan Rogers, Senior Client Education Instructor at TD Direct Investing. Don't forget to check out WebBroker for more educational videos, live, interactive master classes and upcoming WebBroker webinars. Some interesting ones definitely on deck. The threat of a recession and slow growth in China have been bad news for the mining sector. According to Greg Barnes, Managing Director at TD Securities, longer term, the supply and demand dynamics could be leading to a supercycle in the commodity space. Here's our conversation. >> Particular that the zero code policies in China. Weakening economy… Slowing growth, you know, China is struggling. It's not a good recipe for metals demand which is what we've seen. Plus, the fight against inflation, higher rates, strong dollar. Very strong dollar. Also drives of commodity prices. So I understand why the sentiment is where it's at currently. The fears of our recession are obviously very high. And that's not a time generally that you are aligning stocks in a big way. >> The central banks take the actions they do, the US dollar reacts, the entire space reacts. But even in the sense of some of the budgets for these companies, every sector is seeing, you know, increased costs whether it's running the business or paying the workers to work in the business. >> Yeah. Mining costs at the operating level are up 10, 12% here to date. That's a bad combination when you have costs going up in prices coming down. You have a margin squeeze. Companies are doing all they can to reduce costs where they can. We've had high energy prices coming down. What I will say is the commentary we are getting from the companies currently is that it looks like that inflationary pressure has peaked. It's not coming down yet. And inflation will remain high well into next year. At the beginning, we are beginning to see the first signs as we get towards 2024 that some of the supply because they are seeing in a budgetary process is needing to come down. So it looks like we are just about to come over the peak and see some, perhaps, brighter days ahead of the cost side. >> If we just took today in a vacuum which of course we cannot do is investors, but this seems to be a brighter day, does this speak to the volatility right now the market? Seeing these kinds of swings on the daily basis to Penning on the headline? >> Yeah trying to figure outhow deep it will be… Some potential do not have a recession? I'm not sure. People are struggling at that. A little good news goes a long way. so I think what we have seen in the last couple of days, today in particular is the US dollar coming down and prices going up. >> Longer-term, obviously there's a great deal of fear that we will hit a recession. The central banks and the fed, true to its word, we have to stay the course, sleigh inflation, that means higher unemployment… And that slow.… When we emerge from that, everything moves in a cycle, a business cycle as we know it, we, the other side, how to commodity start looking on the other end? >> I think very good. Supplies particularly difficult right now. I don't think I don't think that's can change much. Copper and gold, no matter what commodity you're talking about there has not been a lot discovery the last five or 10 years. Building a mind today is a very difficult thing. Particularly in an inflationary environment like we have right now. It's other environmental factors. It's social licence to operate. All these things are very difficult to achieve. The mining companies have stepped back. Understandably. So, I don't see the next generation of investors taking copper for example. We can have some supply growth in 2023, but in 2024. But in my view, the next big supply growth isn't even possible until probably 2028. Because the mines are not being built. They need to be sanctioned right now to achieve .27, 2028 in that cycle. So with the supply constrained coming out of a recession, we will see improved demand and I do believe we are setting the stage for a potential supercycle in some of these battery driven metals like copper, like nickel, cobalt, lithium. The stage is being said. >> You have to imagine that the companies at the heart of all this have the same analysis. The same market dynamics. What is it about the current environment that they just can't put that money to work. Saying "we know, if this happens and this happens and we come out of a recession, which will, the huge demand?" Why not build it now? >> The inflationary market we are in right now, it's very hard to put in an opinion. It's getting the government to put it in place. That's takes years. Shareholders are very cautious about companies building big products. They would rather have a capital or the money back in their hands rather than the companies building products. Big projects are difficult to build and very expensive. So there are headwinds towards developing or sanctioning the next big projects. They are pretty high right now. It is delaying to make those decisions. > We talk about past commodities and supercycle's. There's a set up here in a few years and we could be entering another one. Have similar characteristics? People look back in history and say "if I want to know what this looks like I'll just look at the last one." >> The last one which is in the early 2000 was driven by China industrializing and growing and urbanizing. This will be different. I think will be driven by decarbonization and will be driven by a lack of supply. How those play out, decarbonization element of it will take some time to play out but it is happening. The lack of supply, I think that's a long-term issue as well. We need higher prices to justify building the next generation. So supercycle have different elements to them. How this and will play out, I think is the two key themes we have to watch. >> In terms of the investment obviously, you laid out the reasons why, even though we can see further down the road, the investment is just not there for these mines. Are the materials there? Ultimately to meet the demands of humanity going forward? Do we have the copper and the gold? >> Ultimately they are. copper grades of come down in the last 30 years. That's going to continue. Minds get deeper. They get into different difficult jurisdictions of the world. So those pressure costs, they ultimately mean that copper prices for example have to go high to justify it. >> That was Greg Barnes, Managing Director at TD Securities. Let's do a quick check on the market right now. Yesterday's rally was short-lived. Now we are giving it back. 18,440 and the TSX Composite Index down 208 points a little more than a full percent. Seeing weakness across the board. Let's check in on the financials. Manulife right now down about 1 1/3%. Noticing some of the miners managing to stay in positive territory. You have Kinross up 1.9% right now. South of the border, the S&P 500, that broader read of the American market down almost to the tune of 2%. Let's check on the NASDAQ as well. The tech stock seems to be getting hit harder on both sides of the border. The tech heavy NASDAQ down a little more than 3%. We showed you Apple earlier in the show, some concerns about a weakening economy weakening the demand for iPhone 14. Of course Amazon will have its own concerns about a weakening economy for a new generation. 2.6% of the down side right now for the e-commerce giant. 114 bucks, almost hundred 15 a share. We have new data today about the state of our economy. While it did edge up in July, the flash estimate for August was flat. Indicating that growth has begun to slow. But will not slow down and will our economic growth be enough to stop our central bank from delivering another rate hike in October? Anthony Okolie joins now with more. >> Given the latest data, TD economics is not think this will impact Bank of Canada policy growth. The Canadian GDP did surprise on the upside in July according to the latest. Momentum is clearly slowing and we did see GDP rolled by minuscule points in July. Expecting a drop of 0.1%, now beginning a flash estimate for August was essentially flat. And when you look at growth for the month of July, it was really led by the goods sector which saw a strong performance since April. It was led by mining, oil and gas sectors… The strongest strongest growth during the month. According to TD economics, growth was driven by increased synthetic oil production as well as market crude in Alberta. Also the agricultural sector. Of course that rose at a substantial clip by an increase of wheat and grain production in July. Meanwhile economic activity across the service sector… This is interesting. It saw its first contraction since January. The areas that were impacted, retail trade, accommodation, foods and services, that was a drag on GDP. Consumers are starting to pull back on their spending. Given high inflation, higher interest rates. A TD economics says that despite the upside from today's GDP release, the Bank of Canada still needs to see further slowing in the economy in order to ease inflationary pressures. Greg. >> So this report today and TD economics, not in our central bank off its path that it's on right now. What about going forward? The economy and rate rate marks in the future? >> I have a chart to show. A couple things to highlight in the chart. If you take a look at the fourth quarter, you can see the TD economics is seeing weaker growth versus the third quarter. And it will continue into the second quarter of next year. We talk about the target policy rate for the Bank of Canada, TD economics is calling for a terminal rate of 4% by the end of the year. Now currently, the bank's policy rate sits at 3 1/4%. They believe that the terminal rate of 4% will hold until fourth quarter of next year. So again, that means that there will continue to have a couple of quarters of weak economic growth to deal with. >> Interesting stuff indeed. Anthony great to have you off-topic show it again in the show. >> My pleasure. >> MoneyTalk's Anthony Okolie. On a programming note, we will not have a show tomorrow as it is the National Day for Truth and Reconcilliation. Coming up on Monday we will have Chris Wheelan, Senior Canada Rates Strategist at TD Securities take your questions and feel free to email moneytalklive@td.com. Thanks for watching and we will see you Monday. [music]