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The Currency Market is Talking and Investors Would be Wise to Listen



Being the contrarians we are, the consensus view at times tends to rub us the wrong way, especially whenever it appears investors are working backward to justify whatever action taken by the market.

More recently, we’ve become very worried about the rocketing U.S. dollar and the corresponding large selloff in bonds that is being rationalized as a foreteller of inflation on the premise of monster-sized fiscal policies by U.S. President-elect Donald Trump.

Suddenly, the global deflation trade has magically disappeared and equity market participants are welcoming the Federal Reserve’s upcoming rate hikes with open arms — something that would have sent markets crashing down in the past.

As a result, investors have been stampeding into inflation-beneficial sectors such as insurance companies and banks while dumping utilities and REITs. Specifically, since the U.S. election, Canadian banks are up on average 3.6 per cent, insurance companies are up 7.1 per cent, while utilities stocks and REITs are down 4.7 per cent and 2.6 per cent, respectively.

More troubling is that pundits and strategists are almost universally viewing the action in the bond market and the U.S. dollar as a positive sign for the global economy when in fact we think it represents the greatest risk to its stability since the onset of the financial crisis in early 2008.

We are not alone in our worries as Central Banks in Japan, Mexico and Europe are quite terrified of their collapsing currencies some of which are immediately reacting by announcing “unlimited” bond buying or increasing their overnight rates.

They have every right to be concerned as we’ve learned from experience that whenever the bond and currency market tell you something, you better listen. In particular, we see three major risks from the ICE U.S. Dollar Index, which is up 28 per cent from its May 2014 lows and now at 13-year highs.

Capital outflows in emerging markets

Higher U.S. interest rates and collapsing local currencies — or the fear thereof — have caused capital flows out of China and other emerging markets, which makes it very difficult for them to fund fiscal or current account deficits.

For example, there has been a whopping US$400 to US$550 billion of capital leave China this year according to Bloomberg estimates. However, this outflow has likely accelerated, especially as the yuan reached an eight-year low last week after selling off nearly 6 per cent, it’s largest weekly decline in over a decade.

In total, emerging markets experienced US$739 billion of capital outflows last year as an immediate reaction to the U.S. dollar rally, according to a recent Reuters report. While this outflow abated somewhat when the dollar stabilized mid-year, it wouldn’t surprise us to see a return to large outflows given the recent action over the past week in foreign exchange markets.

To add some perspective, this is quite the reversal from the US$4.6 trillion of gross capital that flowed into emerging markets between 2009 and 2013, according to IMF data.

Higher U.S. dollar denominated debt

Another serious issue is all of the dollar-denominated debt that has exploded higher globally, with over US$9.8 trillion at the end of Q2 2015, according to the Bank for International Settlements (BIS). Of this, emerging market economies account for US$4 trillion, double the figure from five years ago.

Consequently, these debt service payments have increased by 20 to 50 per cent in the past two and half years thanks to the rise in the dollar against local currencies.

Weaker corporate earnings

Finally, corporate America has become over reliant on cheap and readily available capital to financially engineer their growth through either share buybacks and or mergers and acquisitions while organic growth rates have been abating at this late stage of the market cycle.

The problem now is two-fold as not only has their cost of debt now risen with the selloff in the bond market but whatever remaining organic growth rates they have will be impacted especially among those with international operations thanks to the higher U.S. dollar.

Martin Pelletier, CFA is a Portfolio Manager and OCIO at TriVest Wealth Counsel Ltd, a Calgary-based private client and institutional investment firm specializing in discretionary risk-managed portfolios as well as investment audit and oversight services.

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Beauty Week is back at Hudson’s Bay in Toronto and it’s time to get glam



Beauty enthusiasts rejoice! Beauty Week at Hudson’s Bay is back in Toronto for another year. It’s time to stock up on all of your fall essentials and, maybe discover some new ones. 

From Friday, August 18 to Sunday, August 27, you can expect a truly elevated beauty experience in-store with incredible special offers, limited-time gifts, and exciting activations. 

If you’re a diehard beauty lover, you’ll already know that Hudson’s Bay is the place to shop thanks to its extensive range of over 195 skin and makeup brands from both luxury labels and masstige brands — including Tata Harper, Estée Lauder, YSL, Nars Cosmetics, Bobbi Brown, and so much more.

Throughout The Bay’s Beauty Week, visitors can take in some at-counter activations and interactive expert-led tutorials, where there will be chances to get makeup touch-ups from top-tier brands, try a spritz of the most alluring fragrances, and sample tons of new products.

This year’s Beauty Week highlight is the ‘Best in Beauty’ tote, a meticulously-curated selection of 30 deluxe samples from an array of top-tier brands like Dr. Barbara Sturm and Shiseido spanning skincare, fragrance, and makeup — all in a super sleek bag.

The tote, which is valued at over $300, is retailing for just $39 and is a fantastic way to explore new products (without breaking the bank). However, there is a limited quantity, so if you want to get your hands on one, you’ll need to be fast.

Wondering exactly what Beauty Week’s free gifts with purchases entail? If you spend over $95 at Lancôme, you will receive a six-piece set valued at $130. Or, you can get an Estée Lauder gift valued at $170 with purchases over $80. (And that’s just to name a few.)

If you’re a Hudson’s Bay Rewards member, you’ll also get $20 in Hudson’s Bay rewards when you spend over $100 on beauty.

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The Canadian Armed Forces are hiring for several non-combat military jobs



The Canadian Armed Forces (CAF) have several non-combat jobs, some of which do not require a college degree or past work experience.

Life in the forces has several benefits, such as paid education plans (college, university and graduate-level programs), 20 paid vacation days, health and dental coverage for you and your family, maternity and paternal leave, and pension plans. You can learn more about the benefits in detail here.

And to make it easier to gauge if you qualify, the listings also include related civilian jobs to see if it’s your ideal role.

Financial services administrator

Related civilian jobs: Financial records entry clerk, financial manager, accounting technician, bookkeeper, budget officer, cashier clerk, business planner technician, and verification manager.

Description: You’ll help budget resources for all military activities besides providing financial assistance.

Education: You need to have completed Grade 10.

Duties: As a financial services administrator, you’ll be responsible for bookkeeping and managing budgets. You’ll also provide support in accounts payable and accounts receivable.

Work environment: Those in this role work at CAF bases, on ships or overseas. You might also be expected to help special operation units, recruiting offices, schools, and medical organizations.

Postal clerk

Related civilian jobs: Mail clerk, mail sorter.

Description: You’ll provide postal services to members and their families at bases and establishments.

Education: Grade 10. No previous work experience or related career skills are required.

Duties: As the postal clerk, you’ll handle mail duties.

Work environment: Besides a postal office, you may work on a ship or a mobile postal van. You might be expected to serve with Royal Canadian Navy, the Army, and the Royal Canadian Air Force in Canada and abroad.

Dental technician

Related civilian jobs: Dental assistant, dental hygienist.

Description: You’ll be helping dental officers provide dental services to CAF members, their families, and dependents.

Education: Level II dental assisting diploma from an accredited college or a National Dental Assisting Examining Board (NDAEB) certificate.

Duties: Those in this role will be responsible for various responsibilities, including disinfection and sterilization of dental equipment, applying rubber dams, placing cavity liners, and controlling bleeding. In addition, you’ll assist in laboratory procedures like creating casts, custom trays, and mouthguards.

Work environment: This role will require you to work in a military dental clinic, a Mobile Dental Clinic, an Air Transportable Dental System, or onboard a ship. You might be expected to work on a base in Canada or other operations in other parts of the world.

Human resources administrator

Related civilian jobs: Records administrator, data entry supervisor, receptionist, office manager, executive assistant, payroll clerk, and information management technician.

Description: Provide administrative and general human resources support.

Education: Grade 10. No previous work experience or related career skills are required.

Duties: In addition to human resources administration and services, you’ll be handling pay and allowances, managing automated pay systems, and maintaining personnel records.

Work environment: HR administrators work at all CAF bases in Canada. They also work on ships and overseas to support the Canadian Army, Royal Canadian Navy, or Royal Canadian Air Force operations.

Medical assistant

Related civilian jobs: Emergency medical responder, ambulance and first aid attendant, registered nursing assistant, licensed practical nurse, and hospital orderly.

Description: Successful candidates will help treat the sick and injured in CAF units. You’ll be assisting and supporting nursing and medical officers.

Education: Minimum of Grade 11 biology, Grade 10 physics or chemistry, and Grade 10 math.

Duties: You’ll provide initial care and essential life support treatments in trauma cases. You’ll help with health assessments (hearing and vision tests, perform basic lab procedures, etc.) and initiate and manage medical records and reports. You’ll also be expected to provide support and first aid during training exercises.

Work environment: Medical assistants may serve with the Royal Canadian Navy, the Royal Canadian Air Force or the Canadian Army as part of the Canadian Forces Health Services Group. Those in this role are exposed to the same risks as the forces they support.

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Porter’s new loyalty program promises to match Air Canada’s Aeroplan status



Porter Airlines is once again stirring the pot among Canadian airline rivals, now going after Air Canada’s Aeroplan members by offering to match their loyalty status to an equivalent of their own.

The beloved airline, which recently ranked as having the best cabin service in North America, challenged the competition for the second time this year, after previously deploying a similar tactic against WestJet in the spring. 

Earlier in April, Porter presented customers with a limited-time offer to match the loyalty status of WestJet’s patrons with VIPorter levels.

Now, they’re offering Aeroplan members to seamlessly transition to an equivalent VIPorter Avid Traveller status based on their existing membership tier.

Members can then take advantage of an array of travel perks that come with flying Porter, including seat selection, baggage, and flight changes.

For those currently holding an Aeroplan membership, there are two ways to acquire the Avid Traveller status for the rest of 2023:

Status-Based Match:
  • Aeroplan 25K members = VIPorter Venture
  • Aeroplan 35K members = VIPorter Ascent
  • Aeroplan 50K, 75K, and Super Elite = VIPorter First
Flight Segments-Based Match:
  • 5 flight segments = VIPorter Passport
  • 8 segments = VIPorter Venture
  • 17 segments = VIPorter Ascent
  • 28 or more segments = VIPorter First

Members will have to first submit their applications on Porter’s website. Registration will remain open until September 6, 2023.

In order to maintain their membership level through 2024, customers will have until the end of 2023 to reach the following reduced qualifying spend (QS) targets:

  • Passport = $500 in QS
  • Venture = $750 in QS
  • Ascent = $1500 in QS
  • First = $2500 in QS

Over the past year, Porter has launched an aggressive expansion strategy, including everything from introducing longer flights on newly-purchased jet planes flying out of Toronto Pearson, free WiFi, and a new all-inclusive economy experience.

With Canadians losing both Swoop and Sunwing as WestJet incorporates both into their mainline business, Porter’s direct competition is welcome to keep prices competitive.

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