BMO Nesbitt Burns
1 First Canadian Place
38th floor, P.O. Box 150
Toronto, ON
M5X 1H3

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Trust this note finds you well and enjoying this excellent summer weather.
Your portfolio posted gains again in July. You have experienced positive performance in 2020 and over the last twelve months.
Outside of the Canadian banks, corporations have effectively completed this quarter of earnings reports.
Not surprisingly, the results reflect the uneven nature of the recovery.

Businesses that can function in a remote working environment are doing well (for example the technology sector). Those that require a physical presence (hotels, etc.) are not. (As an aside, this was the best quarter on record as far as earnings beating expectations (according to Refinity, with data dating back to 1994), reflecting very negative expectations heading into the quarter as opposed to stellar numbers on the whole. (Basically, the analyst community got it wrong)).
The latest data from the job market (both in Canada and the United States (U.S.)) reinforces this. Some industries have begun to recovery and rehire (manufacturing) while others have not (airlines, etc.).
Stocks continue to grind higher with the U.S. outpacing Canada. This makes sense: Technology is the largest sector of their market while in Canada it remains much smaller than Financial Services and Resources (areas that have yet to recover let alone post new all-time highs).

We remain careful and cautious in the short-term while constructive and confident in the medium-term.
Our investment strategy remains sound and continues to evolve to align with the enduring and positive trends that we have identified: Own a properly diversified group of high-quality U.S. and Canadian investments that pay dividends or interest. These are companies that are central to the economy with businesses that are finding ways to adapt and innovate in this very unusual time in our history.
You have been and are in a strong position financially.
As always, we have a clear plan and sound process to navigate the times ahead - be they challenging or positive.
The view from Brian Belski, BMO’s Chief Investment Strategist:

"Path of Least Resistance Remained Higher in July - The S&P 500 posted a … gain in July, marking its best monthly return since April, and now stands less than 2% off its all-time high back in February. While the Fed’s liquidity tailwind continued to be the default explanation for US equity strength, vaccine optimism and better-than-expected second quarter corporate earnings results certainly provided a boost during the month and also helped quell growing fears among investors that the economic recovery is stalling. From our perspective, as we look toward the final months of 2020, the broader theme that will likely continue to hover over US stocks is one of increased uncertainty and volatility (elections, COVID-19 cases/vaccine, relief package, economic recovery), and represents a key reason why we do not view the current pace of S&P 500 gains as sustainable in the coming months. That being said, we still believe investors can find alpha-generating opportunities during this period if they stay selective and practice an active investment approach… While the S&P/TSX posted a solid gain in July, the strength was mostly driven by the Materials sector [Gold] … Overall, the breadth of outperformance was still strong within the S&P/TSX, as all eleven … sectors posted gains. Indeed, our work shows a broadening of performance, like we have seen the last few months, typically portends to additional overall market price gains." Portfolio Strategy – August 2020. BMO Capital Markets.
  • Stocks in your portfolio that made a new 52 week high this past month: Accenture*, CN Rail*, Home Depot, Microsoft*, Qualcomm
  • Stocks in your portfolio that made a new 52 week low this past month: None
  • The Loonie gained one cent versus the US dollar to $0.75
Thank you.

We wish you all our best,
Ian, Gab & Kaitlyn

* This specific security is covered under the research of BMO Capital Markets. For a full list of company specific disclosures keys please visit or ask your BMO Nesbitt Burns Investment Advisor for a copy.