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More cuts, thank you very much! | Watch who you invest with
Wealth Awesome August Newsletter
Qayyum Rajan
August 23, 2024
Welcome to the August edition of the Wealth Awesome newsletter. Thank you to the 15,500+ 🇨🇦 subscribers who join us today!
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Market Update
Summary
Canadas Labour Market Hits the Brakes 🛑
In July 2024, the Canadian labour market showed continued signs of cooling, with employment edging slightly lower for the second consecutive month and the unemployment rate holding steady at 6.4%.
A significant decline in the labour force participation rate, particularly among younger workers, helped maintain the steady unemployment figure despite weak employment numbers.
Wage growth, although still high compared to other measures, showed signs of slowing.
The labour market's softening, coupled with a sluggish economic backdrop, supports expectations that the Bank of Canada will cut the overnight rate again next month.
⏱️ TLDR: Canada's job market is slowing down, with fewer people getting jobs and wages not growing as fast. This is because there are fewer job openings and less demand for workers. As a result, the Bank of Canada might lower interest rates to help boost the economy.
Key Takeaways 💡
1. The unemployment rate held steady due to a decline in the labour force participation rate, masking weak job growth.
2. Wage growth is slowing as job openings decline, supporting expectations for another rate cut by the Bank of Canada.
Stocks
Canadian Stocks over the last 1 months
Take A Note on Your Brokerage Interest Rates
With interest rates being so high, you may be wondering if the brokerage you use actually pays out interest. You might be surprised to find out that actually - not all are equal.
This is from Interactive Brokers who generally pay quite a bit more than others - across currencies.
Thats for USD. For CAD its relative to our interest rates dropping as of late. You do get this on a per currency basis!
Interactive Brokers Cad Rates
Now lets look at others:
Questrade is super sneaky 😡 they set their own Prime Rate and then create a calculation of interest. What does this mean?
Right now with <$250,000 you get 0% interest paid on your funds and 0% as well if its above 250k. That is crazy.
Questrade Prime Rate
Questrade Interest Calculations
Wealth Simple on the other hand is in line with Interactive Brokers - here is their approach.
Wealth Simple Interest Rates
Bottom Line - Be careful who you park your funds with. Sometimes the cost is not what you think it is!
Like trading on your phone? Nobody gives better market access than Interactive Brokers
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See you next month!
The Wealth Awesome Team
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