John De Goey, senior investment advisor and portfolio manager, Wellington-Altus Private Wealth

FOCUS: Personal finance and ETFs

MARKET OUTLOOK:

The ongoing discussion about whether or not central banks will pivot is a bit of a red herring. We’ve already met the technical definition of a recession and inflation remains a major challenge that needs to be met head-on. Even a modest reduction in inflation would not be enough to warrant a meaningful deceleration of hawkishness. My view is that central banks need to hike by at least 50 basis points at the next meeting no matter what is happening with employment numbers or on capital markets. We’re in a world where cognitive dissonance is driving narratives. We’re also in a recession, but many pundits won’t admit it. The only way to curb inflation now is to endure a recession.

Despite this, the dominant narrative is that a recession will either be averted (too late!) or that it will be mild. In fact, the disconnect between inflation and rates is so extreme that only a severe recession will solve the inflation problem. That’s a message that virtually no one wants to hear. It’s not pretty, but it’s the truth and someone has to step up and say it. It may as well be me. I believe we are in for a very nasty fall.

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TOP PICKS:

BetaPro S&P 500 Daily Inverse ETF (HIU TSX)

BetaPro S&P/TSX 60 Daily Inverse ETF (HIX TSX)

Cash