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[music] >>Hello I'm Anthony Okolie in for Greg Bonnell and welcome to MoneyTalk Live, brought to you by TD Direct Investing.

Coming up on today's show, we will hear from TD Cohens Merryman Mario Mendonça on the outlook for Canadian banks. TD wealth's chief well strategist Brad Simpson will give us his view on whether the recent rise in market volatility is set to continue.

And TD Securities Oscar Munoz will give us a preview of what to expect from next week's rate decision.

Lesson today's WebBroker education segment, Jason Hnatyk will take us through how dual listed shares work and I can find them on the platform.

Before we get to all that let's get you an update of the markets.

Will start in Canada opening a higher after starting an all-time high on Thursday, largely driven by mining shares, reevaluating the possibility of a bigger interest rate by the Fed rather interest rate cut by the Fed next week. Up about half a percent.

Take a look at some of the big movers this morning, or today, B2Gold Corporation is getting some bids today.

Now, of course gold producers of been tracking the rise of the price of gold which has surged to an all-time high today amid expectations of a Fed interest rate cut next week and a softening of the US dollar and currently, B2Gold is trading up to the tune of 4%.

Let's take a look at how markets are doing across the border, south of the border, the broad-based S&P 500 did rise at the start of trade as it attempts to extend its winning streak to 1/5 straight day. Now, Wall Street of course is looking ahead to next week's meeting where, as I mentioned, the Fed is expected to lower interest rates by 25 basis points and currently the broad-based index is up about 30, almost 38 points or 0.6%.

Taking a look at the tech heavy NASDAQ, also trading higher and also looking to record 1/5 straight day of gains as well. Right now the tech heavy NASDAQ is up but 110.4.6 percent.

Take a look at some of the big movers today, shares of Boeing are under pressure after factory workers went on strike earlier Friday.

After rejecting a new labour contract. Currently, the stock is down to the tune of .2%.

Some of the big movers include shares of database software comedy Oracle which saw some strong buying up of the company revealed its revenue forecast and shared strong guidance for its fiscal year.

Right now the stock up just over 1%.

And that's your market update.

The FOMC is widely expected to start its long-awaited easing cycle next week. While a 25 basis point rate that is being priced in by the markets, a 50 basis point cut is not being ruled out.

A key reason is why that is is the state of the US labour market. Recent economic data continues to suggest the job market was losing steam. The latest US job openings and labour turnover survey known as jolts, showed of job openings dropping to a 3 1/2 year low.

And as the chart shows, the larger than expected decline of unfit in unfulfilled jobs meant there were just over one open position for every job seeker in July, the lowest since 2018.

So looking ahead to next week, TD Securities expects the Fed will opt for a conservative 25 basis point cut.

Looking forward, TD Securities expects additional 25 Basis Point Rate Cuts in November and in December. They also look for the Fed to continue cutting by 25 basis points at each meeting next year until it reaches 3% by October 2025. Oscar Munoz, chief strategist at TD Securities joined Greg Bonnell to discuss.

>> With the market in the Fed, they really care about the Fed at core. Year and year change, actually the month and month increase.

That actually came at a bit stronger-than-expected right? So the number wasn't really what the Fed would like to see.

But in the grand scheme of things, on a big it's good to be a dealbreaker.

I do think that stickier prices particularly, a bit concerning, but we will have to wait and see what September and October data bring.

Overall, we are still of the view that inflation is likely to continue to normalize in the near horizon so, even in… We don't think that 0.3% month-to-month increase will translate into the court PCE which is what the Fed actually target's for forecasting.

2% month-to-month increase for the court PCE, still in the vicinity of what the Fed would like to see.

>> So as the Fed it does headed to that meeting next week in the market expecting some sort of rate to move from them, when you think of in a make of inflation?

What are they gonna do with all this?

>> I think in today's day, It sets the discussion between 25 and 50 bibs but they will probably start with a 25 bit rate cut. I know the market was debating if that was good to be the case or not but I do think that focusing too much in September, I think it's going to be very important as well is the guidance for next week.

They're gonna tell us pretty much what they're going to do between now and the end of the year. Also expectations for 2025. And even if they don't really implement or start easing the cycle in the 25 rate cut, I think the 50 BIP option will remain on the table. The Fed will stay data dependent and I think labour market continues continue to garner the most attention and we are just a jobs report away from the Fed deciding to actually go with that 50 BIP cut. Maybe not at September but could happen in November or December.

>> Some thinking out there Oscar that maybe if they decide to go for 50 basis points, half of a full percent as the opening acts that could actually, what are you saying that we are not seeing?

>> I think so Greg.

I think we are of the view, the market in general is of the view that the only way the Fed can ease rapidly is because the economy is getting into a recession or that food conditions are deteriorating very rapidly. I don't think that's the case. I think you have to look at it from where we are in terms of monetary policy versus where we need to be. And I think the Fed can manage that they could start on the faster side from lowering rate cuts from 50 BIP cuts just once this year and then died that those decisions become more valuable.

Depending on the labour market.

I don't think the market is in a take it that bad. I think we saw evidence of that on Friday similarly in the headlines, supporting a 50 BIP rate cut just of the market actually rallies, I think we are overplaying that story.

>> You mentioned labour a few times. I want to get your take on what we are seeing at the US labour market.

Our you're still adding jobs.

Is that a bit overdone?

>> I think the market has to look ahead in the market has to expend and extend the recent toughness that we are seeing in the data. I they had they have to have some odds.

Entering a recession… I think that's fair.

But I think the economy is going to enter a soft landing. And in that view, I think the Fed is probably not an overdue policy because in the near term. Because in general, the economy is going to normalize here and probably achieve a soft landing between now and 2025.

>> Okay. So let's talk about, we have a full dance card this fall. We see inflation coming with a little stickiness on core, watching the labour market, also watching a presidential election that is just around the corner.

We had the debate last night between Harris and Trump.

Big takeaways for you.

> I think it's clear that Kamala Harris did better in the debate.

Also support that view. She did a better job in terms of connecting with undecided voters.

We will see at the end how that translates into actual polling.

That will remain to be seen if she gets an actual advantage.

I still think the story doesn't change much. We will still be seeing a close race that will be decided in a handful of states.

And it's still a race that will be too close to call.

We will have to wait until November.

>> I think the people who live in those swing states, still seven that we need to watch.

>> I think Wisconsin, Michigan, Nevada, those of the key states. Pennsylvania is going to be very important as well.

This is where the money is going to be spent.

The candidates are going to continue touring and envisioning. It is a bit funny that they only focus on those states because they pretty much know how the voting is in a go and the rest of the country. But that's how it works in terms of the electoral voting in the US.

>> Perhaps inform a little by the debate last night, a lot of information about policy from either candidate.

What a commune if either or takes the White House.

For the economy and for the market.

What should we be thinking in terms of investors about that?

>> Yeah, for now I think there was no focus on policy really. The differences are big though. We do think the trump brings more for markets particularly for 2025, his policies ideas, in terms of trade and immigration, I think I could have a meaningful impact for 2025 if he goes through with those initiatives particularly on inflation and growth.

It could be stagflation areas for next year.

You have, if he goes through with… Policies in particular the tariffs, that could increase inflation meaningfully in the short term.

And also a negative hit to growth, similarly with amelioration.

Around what Trump might do. We think Harris is mostly a status quo.

Our view has been the for now the market is probably paying more attention to affect policy in the near term but as we get more clarity in terms of what the Fed might do between now and then at the end of the year, into 2025, the market will start focusing more on the actual election results. So as we get closer to November, we start getting more of a sense of the polling and expectations. I think the market is in a start pricing of the thought >> The market is paying attention to Fed policy how much of the presidential candidates >> I think for now whatever the Fed does in terms of next week and in September if they decide to do 50 in November, I think it's going to be read as political.

No matter what the Dems, the GOP is going to hit back on Powell, somebody is knocking to be happy that's for sure. If they do 25, then they start doing 50 after the election, the Dems are going to say that Powell has been political. If they start with 50, you are probably get a start seeing some tricks from trunk Trump on that front so nothing with the Fed does is to be taken well by the part for sure.

>> That was Oscar Munoz, chief US macro strategist with TD Securities.

Now here's an update on the top stories in the world of business today and look at the hello markets are trading.

Air Canada says some operations will start to be affected today as time is running out before a potential shut down because of a labour dispute with its pilots.

The airline called for the federal government to be ready to intervene or to avoid major disruptions which impact it's more than 110,000 travellers a day.

The company said some services like cargo and vacation packages will start to be affected today. While a full shutdown could happen on September 18.

The airline and pilots will be in a position starting Sunday, to issue a 72 hour notice of a strike or lockout.

Now despite those concerns right now, Air Canada shares are trading are up. Investors look past the concerns over a lockdown or rather a lockout.

Meanwhile, open AI has revealed a new artificial intelligence model that it says can reason and solve harder problems in science, coding in math than its predecessors.

The model, the first of the series called "open AI 01 " can be used by healthcare researchers and physicists among others. In a qualifying exam for the international mathematics Olympiad, the new series of models correctly solved 83% of problems according to the company.

OPEN AI says it expects regular updates and improvements to the model which will gradually become available to most CHAT GPT users.

Finally, shares of Boeing are in the spotlight after more than 30,000 workers walked off the job Friday, after rejecting a new labour contract.

The work stoppage halts productions of most of the companies aircraft including its best-selling 737 max.

The strike is another costly blow for Boeing which is trying to increase output and improve its reputation.

Meanwhile production is fallen short of expectations as the company works to eliminate manufacturing flaws and faces other industrywide problems such as supply and labour shortages.

Let's check in on the markets,… Bowing down to the tune of 1.

6%. And here's how the main benchmark index in Canada is trading. The TSX compass that index is gaining momentum today up just over 100 points or about half percent.

We will now take a look at the broad-based S&P 500 in the US where, again, investors are looking ahead to the Fed meeting next week where they are expected to cut interest rates by 25 basis points.

Right now the S&P 500 looks to extend its gain for the fifth straight day period of about 34 points or 0.

6%.

As big banks of all released their third quarter earnings with most being estimates. While they may have underperformed compared to the TD Canadian life insurance companies, or the U.S. Bank counterparts, Mario Mendonça is managing at TD… Says he is still on construction of a group joining Kim Parlee to discuss.

>> Going into 2024, there was a view, and I shared it, that banks were going to continue to underperform.

The way they have over the last few years and the underperformance will be in the form of weaker tax provisions for profit growth and accelerating losses, not a corporate commercial but more on their unsecured consumers. So big credit cards, auto lending and that sort of thing.

For the most part, that's what's happened. The banks of continue to underperform. US money centre banks, underperforming TSX now for I want to say about three the last four years.

So it's been a prolonged period of underperformance.

What was interesting about this quarter is, as you said, most banks lead five of the six banks beat us.

BMI was the only one that, I should say they all beat no grade they either beat us they were online with us.

VMO was the only one that missed in a meaningful way.

Interesting about this quarter was not only did prepacked pretax profit accelerate but you also had EverBank with a capital ratio over 30%.

And then most importantly, we are getting better indications of the resilience of the unsecured Canadian consumer.

So the resilience and credit card lending, auto lending, lines of credit, so the quarter really was positive in a lot of different respects.

I did lead me to the view that this prolonged period of underperformance probably is near its end.

I don't expect our banks to underperform the way they have for the last few years.

>> Interesting.

I also thought it was interesting, you said in your note that you talked about group performance. And it was and is meaningful to talk about group performance anymore because of the disparity within the banks in terms of what they're doing. Then can you talk to us a little about that as well to?

>> Over the many years of and following banks, you rarely see a scenario where one banker, in this case three banks, are up 22 to 23%.

I'm referring to national Royal and CIBC. Several banks are down meaningfully. In this case BM oh down 14 of 15%.

That spread and performance is so wide that it's made references to average performance meaningful less meaningful rather and the disparity in performance between let's say, the banks with, that if performed really well, 22, 23% of the banks that have not performed well, aside from some individual issues facing some of these banks, the biggest differentiator, the banks that if performed well in the banks that are perform poorly is ROE and the change with it within.

The basic performed well have seen banks of our OEE increase in (seized of the (this is one of those areas it really deserves a much closer look. We need to think about why are some banks driving there our OEE's higher and others are much more. That something that I think we ought to spend some time thinking of.

>> I'd like to dig in on that. I think I might say that for the end though because I that is meaningful.

Let's talk with some of the individual performances on the banks and I'm just gonna go in the order that you have.

VMO, which he downgraded to a hold on August 27, that was the one of course that caught most people's attention this quarter.

>> BMO has missed earnings.

The first quarter of 2024 was more in revenue and expenses in the last two quarters it's been on credit losses. There credit losses have been materially higher than peers. And there's no way around it.

BMO in this credit cycle, stands out from its peers in a very meaningful way. There is no way to sugarcoat it.

I really felt that this quarter was going to be the beginning of the end for BMO that this would be an elevated credit loss quarter and they would guide us to something more meaningful going forward.

But it's the opposite.

The Bank is guiding to further elevate credit losses perhaps going on another six or nine months.

It is very clear to me that the Bank of Montréal stepped out of its lane.

Probably from 2020 until 2022 in their lending practices.

He could be things like hold limits being too high.

Banks make these large loans and they syndicate a portion.

The amount that they held onto was too high or maybe they were running a dissector they should not have.

As it turns out, BM oh… Until credit stabilizes and becomes similar to what their peers are experiencing, Bank of Montréal's performance, they are likely to underperform in the quarter.

>> Let's move on to the next one.

Bank of Nova Scotia.

You hold.

A hold is a hold. But it is one of those banks that I've been less optimistic about because I think Scotia is going through so many meaningful changes like shrinking their mortgages, focusing on deposit growth, their balance sheet has not shown any growth. They've been capitally constraint until recently. They need to exit certain businesses in Latin America. My view on Scotia is one of its, I would rather wait to see how the bag navigates through all these changes before I'm going to stick my neck out.

July let's see how they model through. And I don't mean that in a negative way. But how they get through the next year making these changes. I will revisit my call then but I do in a highly one thing about Scotia.

After many quarters of no balance growth we did see some balance growth this quarter. We did see growth in mortgages and in their international business and I think, it might be too early to call but it is clearly positive that Scotia is starting to grow the balance sheet.

>> Interesting. CIBC, you recently updated this from a bio to a hold after the first quarter released its results.

>> Thou his, I think about nine months ago, when I made CIBC our top pick. The stock is done extremely well.

Part of the reason for this is the Bank has traded at a discount to its peers for a long time. It was trading at a discount or in line with Scotia. It was trading at a discount to Bank of Montréal. It was one of those names where the underlying performance was clearly better.

Then the valuation would suggest. We saw growth in pretax supervision, their credit ratio after getting a little high because of losses in US commercial real estate a since moderated, the capital ratio is over 13%.

So when you have that kind of solid performance the discount valuation, it makes sense to upgrade the stock as they did I think about nine months ago.

What was special about this quarter as they continued their solid performance on top of that they announced a normal course issue. They are buying back about 2% of their stock and I think the market really views that positively. Because I think a lot of investors have lost patience with banks, spending a lot of money in US deals. Hearing CIBC say this incremental cash or capital will be spent on buying back stock, I think, certainly relative to Scotia's decision to buy an interesting key core, the market really values that and I think that's why it's been so strong.

>> Interesting. What about national. You have a hold on national. You highlight a couple of things that you could be concerned about.

> National is been one of those names is been really surprising to me. Given the business at national, 10% of their earnings come from Cambodia. Which is leverage to Cambodia commercial real estate. Very big Capital Market. I've been surprised that the stock is done this well. But I'll give them credit, their bets on Cambodia has worked. Cambodia has strong margins, strong growth…… They are a highly efficient Bank. So they've delivered. National has along with Royal, I call it the highest ROE in the group. I don't want to make any bets on national right now. The valuation is right now up there and is not far off from Royal and I still don't like that business.

But ultimately, the reason I'm caution on national is the bet that they have made on Cambodia has worked so far. And my challenge is that you could growth you got gross impaired loans, loans that are challenged, have been rising materially in Cambodia for over a year now.

The Bank is not taking any material charges against those but when I see those that we call gross loans rising if you will, it's a bit surprising to me that something could be deteriorating Cambodia. The market doesn't agree with that. National has a different view.

My view is I don't need to bet on national now.

Certainly not with the increase in gross loans.

>> If I could pull a threat event on the Royal Bank, you said you know it's a good store that you've seen from them and you highlight the Capital Market saying them being overweight that helping not, somebody tells a bit more Royal which you saw.

What's happened with Royal is the reason it's been one of these big performers is the allocation of capital they have made has been certainly they've done a deal in the US. They allocated $5.4 billion to City National a few years back.

Their big allocation of capital was… In Canada. And that transaction has gone extremely well.

The deal closed and they converted systems pretty much on the same day.

It's resulted in very good operating leverage since the deal closed.

But there is more than just HSBC with Royal Bank.

It's also a very strong Capital Market business. Strong Wealth Management, positive operating leverage, buying back stock.

There's really nothing to dislike about Royal right now.

We'll the only thing you might highlight is that it's being paid for that strong performance.

It has the highest valuations.

And that's the challenge. You want to allocate even more capital given without valuation is? The argument I'm making for now is yes.

I expect this will continue to outperform.

>> I want to finish up if I could with a bit of a RO eek as you said that's what's to watch going forward.

What else should we be watching?

>> The way to look at that, the lowest our OEE ratio in the group, say national and Royal at the upper end, what I've been asking myself is this.

What is a good to take for be Mazzaro we to migrate back up to let's say 14%. Their long term target is… What can I take to get there? It's gonna take things like improving their ratio, reducing credit losses, growing and low capital-intensive businesses.

Be they have a pathway to hire are we. The problem is, do you want to buy it now when they're going through this credit problem where credit losses are to be elevated for six, nine, plus months, my answer is no.

But there is going to come a time where we can get comfortable with VMO from a credit for step perspective and they could be the Bank tone because it's got the most room for improvement at the our OEE. And that's part of a longer term thesis. Let's by those banks that have the most room to improve their our OEE. Scotia is one of those names.

Bank of Montréal is one of those names.

>> That was Mariel Mendonça. Managing Director at TD COWAN.

Now let's get to today's educational segment.

There are some stocks the tradable Canada and the US.

Joining us now is Jason Hnatyk, Senior Client Education Instructor with TD Direct Investing. Welcome to the show and walk us through dual stocks can be found in WebBroker.

> First off always nice to be here Anthony, first, when I think about the world, everything is so interconnected in your show does a wonderful job putting that together. Really no more true than it is with finance and when we are talking about investing.

So it's really important to allow client choice and with the direct investing we give clients access to trading in both all major Canadian and US exchanges.

When we are opening up new accounts, you're getting both the Canadian as well as US dollar component to help make things efficiency can help trade where you want to trade.

Is it going to be in line with what's available in your account?

One of the tools that is out there to make things efficient is you mention a dual you can see how we can take advantage of this interesting product.

On our research page I happen to have Enbridge listed up on our quotes overview. If we take a look at the top of the screen here, next to the symbol you'll see the Canadian flag.

What we can take from that is this is a Canadian stock trading in Canadian dollars.

All of the quotes that we see down the need there are to be Canadian dollars.

But importantly, to this conversation is right next to the Canadian flag, there is a view on NYSE. It's a tipoff to telling us that I can trade this particular stock. The same stock trading in the TSX as it would be trading down on the NYSE. Give that link a click.

It'sAll the prices we are seeing here are now in US dollars. What's really interesting about this is it's the same stock, just off by the spot rate of exchange.

Typically, there's knocking to be an up charge opportunity, just with the efficiency of all the markets but this now allows me the choice with can eight my Canadian account or do I want that same investment in my US dollar account with US funds.

Without the need to transfer and a foreign-exchange piece if it's unnecessary.

So the we were to buy the US stock is really the same as the Canadian.

It's really clicking on the "buy and sell" button. Our order ticket is gonna come up and keeping in mind we know it is still US dollars listing on the right-hand side but one tip for traders is the top, I was doing some playing with this before this segment. If it happens to be the case, if your primary happens to be your RSP or TSC or even your Canadian margin like I got here, click on the drop in menu and select the appropriate count. In my US market for this now I know that my are not to be disadvantaged by any sort of foreign-exchange and that's really the best, the best piece of advice.

Be aware of the currency and you'll be able to take advantage of this interesting tool.

>> Very important information, great overview. Is there a way to translate the dual stocks and the currencies on WebBroker?

> Happy to report that there is.

Whether or not we are thinking about transferring in, the side of the margin where you might want to transfer to the US side, at the end of the day when I sell it, maybe I want Canadian dollars back.

Maybe you're transferring between, it's really flexible so let's jump back.

As easy as that can be. Let's get the train to get out of the way. What's cool about this is if you've ever transferred money on the TD platforms, TD Securities is gonna be a very similar process.

Under transfers and withdrawals is when the transfer will be.

That's there for us there. But the point I want to highlight for everyone here is can be the third option down.

By choosing this this will bring you into that page.

Really important.

Same muscle memory that you've had. Just about selecting the… Account let's say we go where we made our fictitious purchase.

And it's going to, I think my demo account is not in a position there, if you're in your live account, simply done by choosing the account after he continued, selecting the investment, the quantity and it will make a real time transfer rate in your portfolio just as simple as that.

>> You make it sound so simple. Jason.

Thank you so much.

>> My pleasure Anthony.

>> Thanks to Jason Hnatyk, Senior Client Education Instructor TD Direct Investing. For more resources you can check at the learning centre on WebBroker or use the QR code to navigate to TD Direct Investing's YouTube page where there are more informative videos.

After a period of relative calm in financial markets, investors have been hit with a bout of volatility in recent weeks.

Brad Simpson, Chief Wealth Strategist at TD Wealth joined money talks Greg Bonnell to discuss whether the bumpy ride is set to continue.

>> If we go back a little bit, we published quarterly which is this big thought piece of what we think is going on in the quarter we call it "all is quiet?" The good news is we pump published it on the 29th that it was like let's look at equity markets and let's look at bond markets and currency markets. We said there has been some bond market volatility in the last few years of course.

But that quieted down.

We said if you look at equity market volatility, it's in the Lowe's of 1993. It is in an area that is nearly unprecedented.

And currency markets, volatility, very similar to that.

In our "all is quiet" we are going well… Really?

How do you shape that out and think about this in terms of you know, the markets concerned over enough about all the money is flowing to a handful of growth names concern considering growth isn't gonna come from other areas and market like the Nvidia companies of the world. If you set back and said "okay so we also have been a three week period, enough to go through because a an assassination attempt of a former President of the United States, a sitting President of the United States that did a debate that was, that shop the world, at his inability to build a strand of thought in an answer to a question, and then within a few weeks after that were placed in a major political party with a new candidate for the Pres.

So if you look at all those and you say there's no volatility?

>> Lo and behold indeed, at its height, we saw the events go up to 65.

RPS cues, we actually mapped out saying this is what it looks like when it elevates.

The other side is when we saw the trade unraveling in Japan. We saw the… Down 12%. When going through all this, what happened is one can argue that it is just to say we got somewhere between 3 to 6 months of volatility just packed into a few days.

>> On Summer vacation!

>> Yeah! Part of it is that Summer vacation and it is the lack of liquidity in the system which is helping drive that.

So if we move they can exaggerate those moves. But I think that you know, if I'm an investor, and I'm looking back and, I think I brought a charter long and I'm not sure if we've got it.

>> I think so yeah, we can show the audience.

What are we looking at and where are we?

>> All we are looking at here is, of course looking into it says January 22 would if you go further up you're looking at 2024 and what you're seeing is the depths.

Way down it's you see the bond market elevated a little bit. While we are showing here is the movement upwards of all of them. More activity in those three.

And I think that's really important.

For what were talking about here.

In that first and foremost is for, a strategist with I am calm an asset allocation Portfolio Manager, the key is to think about volatility like for people like me is, like, earnings to an equity analyst. It is the big thing. Because one way you want to manage those but you also want to capture the upside with that.

So, I think is investors I think we have to look at is the most important pieces I think people see volatility and they think oh, it's dire.

I think you have to step back and look at it and go "first of all, it was a changing of the unemployment rate in the United States.

That by one percentage point okay?

That this was a market looking for an excuse to correct. And it was going to be something.

So our commentary wrote about it.

It was like striking a match on a tender dry forest.

From here what I want investors to look at is to go what we are starting to move here is actually equity markets and fixed income markets and currency markets and commodity markets.

Actually starting to normalize. Actually going through the process of saying "you are notches going to be asleep, you're not just a focus on one thing". A lot of things we will talk about today is not just AI. Where are we in that business cycle? What is happening and ultimately what is that mean for currency markets and commodities markets and equity markets.

That's a breath of fresh air quite frankly.

We think we are going to start seeing more of the. But in a positive way, we are starting to focus on the things we should be focused on again.

>> You talk with the labour market. Where are we in the business cycle?

As humans we want is put a story in there.

One of the stories attached to the volatility, the United States going through, what are we headed for what if we are headed for a hard landing?

Of course, you think well… It's a pretty compelling case and so I think that's your starting point of it.

I think you want to look at it in these terms.

> The picture.

>> Yes. I think this really does help. What we are looking at here is we are looking at the economic cycle. But we are looking at, through the economic cycle through the lens of the quantitative work that we do globally.

We take Canada and the United States and the euro zone and we look at hard and soft data.

Asking somebody how you feel about something, to looking at "what are your sales and what is that look like?

So you can see that early state cycle in the first quarter, China was in an early stage. The economy and that's still true.

And I want us to remember that. They are in an early-stage economy and they're having a heck of a time getting things going again.

One of the things that we said at the beginning of this year, we eat some humble pie, we thought they were going to at least build on an incremental way build their way through some of this and work their way through some of this. Because we have an adaptive approach to doing things, we would be in the camp "you know what? All bets are off.

This is, we know what the long-term structural problems.

That are in place, the near term structural problems are continuing to be a huge headwind there. The other point we are looking at is at the rate of change of this, so Canada, which is highly getting into that later stage, has started to slow more than the other three and really quite quickly.

In the camp he a soft landing but you're also doing it kind of like what is your odds on your outcomes?

There are a lot more odds that it could become something more sinister than that.

Then it would if you compared it to the United States.

Which is also experiencing a slowdown. Without slow down is that all things are pointing to a soft landing.

So the key to this, and one thing I know that you and I have talked about the last time I was here, is that there is an enormous amount of focus on unemployment.

The reason for the is, number one central banks basically have two main things to do.

Manage inflation and manage unemployment.

If push comes to shove, the thing most important to them, unemployment.

Keep people working, inflation two.

If we looked over here, we could reasonably do the discussion today and not talk about inflation once right?

So the only place in the world where that discussion is going on our in presidential debates right now but apparently there is runaway inflation and I know both candidates, what they are doing, they know… If you put that aside unemployment is the thing you're going to watch.

Saying it's the thing even for the global economy that because China is in a difficult spot, often you want to kind of spread your risks around which we still do but also you want to see different drivers.

The main driver of global equity markets, Global Fixed Income markets now is the US. A second one of that is the US, what's gonna happen in the labour market there.

It's the main thing it's gonna call the day. And we have been writing and showing this deterioration of that labour market for months now. And so this is what we think is going to transpire.

And but we are still talking about a fully employed inflation and it has slowed down, it is a slowdown that is very manageable. We think will be more places.

If you look at the other side of the coin, it leads to the consumers of that as well.

It's being done at a rate as desired.

And you don't want to be doing any victory laps here on this. But if I am Jerome Powell, I'm feeling pretty good about this.

>> From the outset, were going to hide rakes and there will be a lot of pain in the labour market and the economy.

>> Absolutely, it doesn't happen.

And that's, you know, you can double down on that now in terms of, coming up in Jackson Hole. We've got this road to 2% inflation.

We're going to be dropping… And they are watching.

That's the thing that they've got going now.

And you know, I confess, we spend an enormous amount of time thinking about that.

I think they are in pretty good shape.

It's going to get worse.

But I think you can reasonably see that this soft landing is falling in place.

>> That was Brad Simpson, Chief Wealth Strategist with TD Wealth.

Now for an update on the markets.

>> We are looking at a look at we are having a look at TD's advanced dashboard for active traders available through TD Direct Investing.

We are looking at the heat malfunction here which gives you a view of the market movers on the to 660 both in price and volume.

Take a look at some of the movers.

Some of the energy names with oil prices up more than a dollar US. Per barrel extending the rally,… After hurricane Francine.

Some names could be in the pipeline, Cenovus, Suncor among the big movers today.

Also sing some green on the screen for some of the basic materials.

Kinross Gold, Barrick Gold trading hi today.

Let's take a look at the S&P 100. Take a look and see what's happening with some of the US names. Seeing some, buying in the text space some buying activity of course delivering some strong fiscal results.

Adobe shares are under pressure of today despite beating revenue and profit estimates, the company reported lower-than-expected forecast for the upcoming quarter and that is a stock sliding Ward 9%.

>> All right is always be sure to do your own research before making any investment decisions.

Stay tuned on Monday's show Jing Roy, VP director and Portfolio Manager asset allocation will be our guest taking your questions about asset allocation. In her main reminder to get a head start by yielding us at moneytalklive@td.com.

That's all for our show. Take care.

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