Financial markets waited all last week for US Federal Reserve Chairman, Jerome Powell’s speech at a meeting of central bankers and were delighted with the outcome.

Powell declared “the time has come” to begin easing rates - making a drop in rates next month (probably 0.25%) all but certain. That said, if the US economy contracts further between now and the next Fed meeting (Sept 17th/18th), then we could see an even deeper cut in rates.

Markets…

There were tentative signs of a broadening in the equity rebound last week with smaller caps posting relatively strong returns. Building on this, both global and local markets this morning have reacted positively the the Fed Reserve speech, climbing about 0.65%, with uranium stocks the surprise star performer (up 12%, based on production cutbacks).

Of course, the next 48 hours will be interesting on the geopolitical front with Hezbollah assessing its retaliatory options against Israel. For now both sides have stepped back from the brink.

Enjoy your week!

Rick Maggi, Westmount Financial