Monthly Economic Report - Mackenzie Investments · Investor Behaviour: According to the chart, markets spend more time in positive territory (bull) than negative (bear). Bull markets

July 31, 2020

Monthly Economic

Report

Mackenzie Investments Market Insights

Source: Bloomberg (Jul 2020)

Commodity Overview

2

0

50

100

150

200

250

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bloomberg Commodity Index – 15 Year Performance to July 31, 2020

68.67



Crude Reality: Price of Oil

3

$0

$20

$40

$60

$80

$100

$120

$140

$160

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

West Texas Intermediate (USD per barrel) – 15 Year Price to July 31, 2020

$40.27



Gold (USD/troy ounce) – 15 Year Price to July 31, 2020

Gold Bullion

4

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

$2,200

Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Jul-20

$1,975.86



Foreign Exchange Rates

5

USD Comparisons – 1 Year Rates to July 31, 2020

Yen vs. USD Euro vs. USD CDN vs. USD

100

102

104

106

108

110

112

114

Jul-19 Jan-20 Jul-201.04

1.06

1.08

1.10

1.12

1.14

1.16

1.18

1.20

Jul-19 Jan-20 Jul-20

1.25

1.30

1.35

1.40

1.45

1.50

Jul-19 Jan-20 Jul-20



Emerging Market Currencies

6

20

30

40

50

60

70

80

90

100

110

120

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-17

Jan

-18

Feb

-18

Ma

r-18

Ap

r-1

8

Ma

y-1

8

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-18

Jan

-19

Feb

-19

Ma

r-19

Ap

r-1

9

Ma

y-1

9

Jun

-19

Jul-

19

Au

g-1

9

Sep

-19

Oct

-19

No

v-1

9

De

c-19

Jan

-20

Feb

-20

Ma

r-20

Ap

r-2

0

Ma

y-2

0

Jun

-20

Jul-

20

Brazil Real Chilean Peso South African Rand Russia Rouble

Indian Rupee Turkish Lira Argentine Peso Chinese Yuan

(Indexed to 100 on July 31, 2017)

Exchange rates against the U.S. Dollar – 3 Year Rates to July 31, 2020



Currency – The Hidden Difference

7

90

95

100

105

110

115

Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20

USDCAD

EURCAD

JPYCAD

Canada U.S. Euro Area Japan Emerg. Markets China WorldS&P/TSX S&P500 MSCI Europe NR MSCI Japan NR MSCI EM NR MSCI China NR MSCI World

Local Currency Returns 1.9% 12.0% (7.7%) (1.3%) 10.7% 23.8% 5.5%

CDN$-Based Returns 1.9% 14.2% 0.7% 3.4% 8.7% 27.0% 9.4%

(Indexed to 100 on July 31, 2019)

Foreign currencies vs. Canadian Dollar – 1 Year Rates to July 31, 2020



A View of Global Market Indices

8

10,000

11,000

12,000

13,000

14,000

15,000

16,000

17,000

18,000

19,000

Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20

S&P/TSX Composite Index Prices - 12 months ending July 31, 2020

S&P/TSX S&P 500 Euro Area Japan Emerg. Mkts China World

1-Year returns to Jul 31: 1.9% 12.0% (7.7%) (1.3%) 10.7% 23.8% 5.5%

Year-to-Date: (3.3%) 2.4% (12.8%) (11.1%) 2.2% 13.0% (2.1%)

Quarter-to-Date: 4.5% 5.1% (1.5%) (2.4%) 7.7% 9.1% 3.1%

Month-to-Date: 4.5% 5.1% (1.5%) (2.4%) 7.7% 9.1% 3.1%



0

500

1,000

1,500

2,000

2,500

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Global Market Results

9

S&P/TSX Composite Index

S&P 500 Index

MSCI Europe Index

MSCI Japan Index

2020

-3.32%

2020

2.38%

2020

-12.84%

2020

-11.07%



S&P/TSX by Sector

10

S&P/TSX returns for 2019 and 2020 YTD

S&P/TSXComposite

Index

InformationTechnology

MaterialsConsumer

StaplesUtilities Industrials

ConsumerDiscretionary

TelecomServices

Financials Real Estate Energy Health Care

2020 (3.3%) 71.9% 30.5% 7.6% 4.3% 1.6% (7.1%) (7.8%) (15.5%) (17.5%) (29.6%) (30.1%)

2019 22.9% 64.9% 23.8% 14.4% 37.5% 25.5% 15.3% 13.0% 21.4% 22.6% 21.7% (10.9%)

(40%)

(20%)

0%

20%

40%

60%

80%



Central Bank Rates

11

Central Bank Rates and 10-Year Gov't Bond Yields - 3 Years to July 31, 2020

Canada United States

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Jul-17 Jul-18 Jul-19 Jul-20

Canada - Overnight Rate 10-Year GoC

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Jul-17 Jul-18 Jul-19 Jul-20

US - Overnight Rate 10-Year Treasury



Central Bank Rates Around the Globe

12

Central Bank Rates - 10 Years to July 31, 2020

0%

1%

2%

3%

4%

5%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Australia

Canada

England

USA (Upper Range)

ECB



10 Year Government Bond Yields

13

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

US

Can

ada

Me

xico

Ge

rma

ny

Bri

tain

Fran

ce

Ital

y

Spa

in

Gre

ece

Swit

zerl

and

Jap

an

Au

stra

lia

New

Ze

ala

nd

Ho

ng

Ko

ng

Sou

th K

ore

a

Ind

ia

Americas Europe Asia

Today

3 months ago

12 months ago

As of July 31, 2020, 3 months ago and 1 year ago (bps)


Mackenzie Investments Investing Insights 14

Global Market Results

Equity Market Returns Bond Market Returns

0%

50%

100%

150%

200%

250%

300%

350%

400%

Canada US EU Japan

-2%-1%-1%0%1%1%2%2%3%3%4%4%

Canada US EU Japan

up to July 31, 2020; total returns indexed to 100, local currency up to July 31, 2020; local currency



Bull & Bear Markets

-26% -17% -15% -25% -35% -39%-25% -20% -27% -38%

-21%-43%

-17%

85% 81%63%

82%

288%

253%

44%

203%

109%

16%

168%195%

4%

-100%

-50%

0%

50%

100%

150%

200%

250%

300%

350%

1956

1957

1958

1959

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Ch

ange

Average gain in bull market: 131%

Average length of bull market: 54 months

Average loss in bear market: (27%)

Average length of bear market: 9 months

Bull & Bear Facts

S&P/TSX Composite Index to July 31, 2020



Bull & Bear Markets: S&P/TSX Composite

The Risks and Rewards of Investing:

▪ This chart represents the bull and bear markets in the S&P/TSX Composite Total Return since 1956. All bars above the line are

bull markets; all bars below are bear markets.

▪ For the purposes of this illustration, a bull (bear) market is defined as a positive (negative) move greater than 15% that lasts at

least 3 months.

Investor Behaviour:

▪ According to the chart, markets spend more time in positive territory (bull) than negative (bear).

▪ Bull markets are, on average, longer and more intense, providing a more significant percentage change.

▪ On average bear markets are more brief, and yet engender fear. It is during these periods that there are significant investment

‘bargains’ to be found.

▪ Investor discipline during bear markets is critical.



Bull & Bear Markets

104% 90%52%

76% 86% 87%

280%

72%

526%

108%

451%

6%

-14% -22% -16% -29% -43%-14% -17% -30% -15%

-45% -51%-12%

-100%

0%

100%

200%

300%

400%

500%

600%

1956

1957

1958

1959

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Ch

ange

Average gain in bull market: 150%

Average length of bull market: 51 months

Average loss in bear market: (26 %)

Average length of bear market: 13 months

Bull & Bear Facts

S&P 500 Index to July 31, 2020



Bull & Bear Markets: S&P 500

The Risks and Rewards of Investing:

▪ This chart represents the bull and bear markets in the S&P 500 Total Return since 1956. All bars above the line are

bull markets; all bars below are bear markets.

▪ For the purposes of this illustration, a bull (bear) market is defined as a positive (negative) move greater than 15% that lasts at

least 3 months.

Investor Behaviour:

▪ According to the chart, markets spend more time in positive territory (bull) than negative (bear).

▪ Bull markets are, on average, longer and more intense, providing a more significant percentage change.

▪ On average bear markets are more brief, and yet engender fear. It is during these periods that there are significant investment

‘bargains’ to be found.

▪ Investor discipline during bear markets is critical.

Mackenzie Investments

▪ This document includes forward-looking information that is based on forecasts of future events as of July 31, 2020.

▪ Mackenzie Financial Corporation will not necessarily update the information to reflect changes after that date. Forward-looking statements are not

guarantees of future performance and risks and uncertainties often cause actual results to differ materially from forward-looking information or

expectations. Some of these risks are changes to or volatility in the economy, politics, securities markets, interest rates, currency exchange rates,

business competition, capital markets, technology, laws, or when catastrophic events occur. Do not place undue reliance on forward-looking information.

In addition, any statement about companies is not an endorsement or recommendation to buy or sell any security.“

▪ The content of this document (including facts, views, opinions, recommendations, descriptions of or references to, products or securities) is not to be

used or construed as investment advice, as an offer to sell or the solicitation of an offer to buy, or an endorsement, recommendation or sponsorship of

any entity or security cited. Although we endeavour to ensure its accuracy and completeness, we assume no responsibility for any reliance upon it.

▪ Unlike mutual funds, the returns and principal of GICs are guaranteed.

▪ Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus

before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

Index performance does not include the impact of fees, commissions, and expenses that would be payable by investors in the investment products that

seek to track an index.

▪ The rate of returns shown is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of returns on

investment."

19

Disclaimer

Documents

Monthly Economic Report - Mackenzie Investments · Investor Behaviour: According to the chart, markets spend more time in positive territory (bull) than negative (bear). Bull markets