Nico's Weekly Insights - A Fragile Rebound: Reading the Signals from a Roller-Coaster Week

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Welcome to your weekly briefing!

It was a roller-coaster week in the markets, driven by speculation, high-profile commentary, and a pivotal speech from the Federal Reserve that was widely misinterpreted. The sharp rebound at the end of the week felt euphoric, but a closer look reveals a fragile foundation. My analysis remains unchanged: the technical and fundamental data still point to a needed reset. Let's break down the key signals you may have missed.

Section 1: The Week's Key Information - A Whiplash Week for Stocks

The market's main narrative was one of extreme volatility, swinging between fear and optimism.

• The week began on a negative note after comments from Sam Altman about a potential "AI Bubble" spooked investors. 

• This was followed by widespread hedging as institutional players positioned themselves defensively ahead of the Federal Reserve's Jackson Hole symposium. 

• A sharp rebound occurred after Fed Chair Powell's speech, which was initially seen as more dovish than expected. The market rallied on inaccurate AI-generated summaries suggesting the Fed was abandoning its 2% inflation target. 

• The rally partially retracted once the reality became clear: the Fed was simply removing a 2020 policy tweak about "averaging" 2% inflation over time. This quick reversal highlighted the rebound's lack of true conviction. My base case remains a

• 5-15% market pullback, most likely in September or October. 

Section 2: Other Key Insights from the Week

Beneath the market's daily swings, deeper economic trends are sending clear warning signs.

• The U.S. Consumer Has Hit a Wall:

  • Underwhelming Amazon Prime Day: Despite extending its Prime Day event, Amazon saw minimal sales growth of around 4.9%, indicating weak consumer engagement. Amazon also refused to provide specific sales numbers. 

  • Cardboard Box Shipments Plummet: U.S. box shipments, a crucial real-time economic indicator, fell to their lowest Q2 level since 2015, signifying a sharp decline in goods being shipped. 

  • Real Retail Sales Are Negative: When adjusted for inflation, real retail sales volumes are negative for 2025, meaning consumers are "paying a little more to get a little less". 

• The Housing Market's Slow Bleed Continues:

  • In the U.S.: For the first time ever,  of the top 50 U.S. metro areas have seen a month-over-month price decline. The typical home now sits on the market for 43 days, a level similar to the pre-2020 market. 

  • In Canada: The housing market is in a significant downturn, with prices down 18.5% from their peak and a collapsing condo market. A "mortgage renewal wall" is approaching in 2025-2026, which will force 60% of mortgage holders to renew at higher rates. 

• A Major Warning from the Bond Market: Vanguard is now recommending a 70% bond, 30% stock portfolio for the next decade. Experts have met this with deep skepticism, warning of "ruined retirements" and noting that bonds may have "4% upside but -40% downside". 

• Foreign Capital is Fleeing Canada: Foreign investors divested a net $43.7 billion from Canadian assets in Q2. This is part of a decade-long trend of net investment outflow, signaling a broader issue with the country's investment attractiveness. 

Section 3: Looking Forward

Several key dates are on the horizon. These could be significant market-moving events, and I will be monitoring them closely.

• This Week:

  • Wednesday: Nvidia (NVDA) earnings report. 

  • Thursday: U.S. Q2 GDP (2nd estimate). 

  • Friday: U.S. PCE Price Index (July), Personal Income & Consumer Spending; Canada Q2 GDP. 

• On the Horizon:

  • September 3rd: Jobs data for both the USA & Canada. 

  • September 9th: The critical QCEW job data revisions in the U.S. 

  • September 17th: The next interest rate decisions from the FOMC (U.S.) and Bank of Canada. 

Section 4: Your Path from Uncertainty to Control

Reading this kind of detailed analysis can feel overwhelming, and it might seem like successful investing requires you to follow every headline. But what if it didn't have to be that way?

The core of my process is designed to give you peace of mind without needing to constantly watch the market. My strategies focus on defining your risk upfront and putting a hard floor on potential losses. This means your plan is built to be resilient, whether you follow the news or not. While these weekly insights are valuable for optimizing your timing, they are not essential for the process to work.

If the idea of investing with a process, not a panic button, resonates with you, here are two ways to start building a truly resilient strategy:

• For a Focused Deep-Dive: Book a Jumpstart Session. In this single, high-impact session, we can tackle a specific challenge you're facing and master one key strategy to give you immediate control. 

• To Explore Your Goals: Book a free, no-pressure strategy call. We can discuss your situation and determine if my educational coaching approach is the right fit for you.