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Daily Pulse


Canadian household indebtedness improved in the first half of 2020 as government support kept incomes afloat amid the pandemic. Household credit market debt dropped to 158.2% of disposable income in the second quarter, from 175.4% previously, Statistics Canada said Friday in Ottawa. That’s due to an 11% increase in household disposable income, while the stock of credit market debt remained relatively unchanged, the agency said.

Canada reported no new deaths from Covid-19 for the first time in six months, according to the latest data from its public health agency. The country last reported zero daily fatalities on March 15, according to the agency’s data that is updated every evening. Canada is seeing its death toll plateau after fatalities spiked above 200 on several days in April and May. The total death count stands at 9,163 as of Sept. 11, according to the government’s data.


Either weaker stock prices or a deterioration in economic activity is the key to prompt a deal in Washington. Because the surprising vigor of the economy has been an important source of support for risk assets, we are getting ever closer to a sharper stock correction. The economy cannot rebound indefinitely without further fiscal support, especially not when permanent job losses continue to pile up and an increasing number of small businesses worry about bankruptcy. Thus, the inability of Washington to arrive at a deal is likely to increasingly matter for risk assets in the coming weeks, which paradoxically means that a market correction will allow the recovery to broaden further next year.

Today, the dividend yield on the S&P 500 stands at 1.6%. While this dividend yield is well below its historic average of 4.3%, it is still higher than the 0.68% yield on the 10-year Treasury note. Imagine an investor having to decide whether to place their money in an S&P 500 index fund or a 10-year Treasury note. Dividends-per-share paid by S&P 500 companies have almost always increased over time. However, even if we make the pessimistic assumption that dividends-per-share remain unchanged for the next ten years, the value of the S&P 500 would still have to fall by 9% over the next decade to equal the return on the 10-year note. Assuming that inflation averages 2% over this period, the real value of the S&P 500 would need to drop by 25%.

Gilead Sciences Inc. agreed to acquire Immunomedics Inc. for about $21 billion, a substantial premium for the maker of a promising breast-cancer therapy, and another big bet by Gilead that an innovative tumor-fighting drug can boost its fortunes.


Global coronavirus cases surpassed 29 million as India, the epicenter of the pandemic, reported more than 90,000 for a fifth straight day. Pfizer Inc.’s chief executive officer said it’s likely the U.S. will deploy a Covid-19 shot before the end of the year, though another vaccine maker’s CEO warned global supplies won’t be sufficient until late 2024. AstraZeneca Plc restarted testing after its vaccine trial was halted last week. Israel’s cabinet backed a second national lockdown, while gatherings in the U.K. will be restricted as new cases climb at a pace not seen since May.

Prime Minister Boris Johnson will put his plan to break international law over Brexit to its first debate and vote in the U.K. Parliament on Monday, amid a growing rebellion from his MPs and further criticism from former premiers and European Union leaders


Oracle Corp. edged out rival Microsoft Corp. in negotiations for the U.S. operations of TikTok, people familiar with the talks said, as the Chinese-owned music-video app attempts to avoid getting shut down in a clash between the world’s two superpowers. A deal between TikTok owner ByteDance Ltd. and Oracle will look more like a corporate restructuring than the outright sale Microsoft had proposed, though it is likely to include a stake in a newly configured American business.

Nvidia Corp. agreed to buy SoftBank Group Corp.’s chip division Arm Ltd. for $40 billion, taking control of some of the most widely used electronics technology in the semiconductor industry’s largest-ever deal.

The author

Michel Doucet

Michel Doucet

Vice-President and Portfolio Manager
After obtaining a Bachelor's degree from the Faculty of Social Sciences at the Université du Québec in Montréal and his Master’s degree, Michel Doucet began his career as a junior economist at the National Bank head office in Montreal. In 1992 he joined the institutional equities and fixed income group at Lévesque Beaubien Geoffrion as an economist and market analyst. Over the years, he has led various projects related to the North American and international economies as well as Canadian public finances. In 1996, the team of institutional economists to which he belongs was ranked first in Canada by Brendan Wood International. In August 1997, Mr. Doucet joined the personal services division of Lévesque Beaubien Geoffrion where he served as an economist, fixed income market analyst and vice president. In 2004, he joined the Desjardins Securities full service team as Vice President. He now occupies the roles of fixed income strategist, economist and portfolio manager. He manages the Securities Portfolio Advisory Group, advisor marketing and distribution of financial planning and insurance.