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Hello everyone, welcome to Economic Impact. Today is October 17^th 2024, and as usual I am with our Chief Economist, Stéfane Marion, who exceptionally is in Calgary right now and we are at a distance. Hello, Stéfane, how are you today?

Good morning, Denis. So we're doing this remotely this morning.

Yeah, remotely exactly. Stéfane, you know, we've been talking about the stock market for a while and we said we should be prudent but despite of that, the stock market keeps going up.

Yeah, the enthusiasm is still there Denis. We're hitting an all-time high and it's in many regions of the world driven by both expectations of more rate cuts by the central banks. So we're talking about the synchronized monetary easing cycle and also expectations that, you know, we could have sizable fiscal stimulus from countries such as China that will help support global growth and obviously earnings going into. But I have to say, Denis, there's a lot of these expectations that are already embedded in current valuations.

And at the same time, you know, valuations are quite high compared to the past.

Yeah.

So if we look at this slide and the little red, you know, sorry– yellow dots shows the beginning of easing cycles in the US And you can see that it's exceptional for the US stock market to be valued at 21 or close to 21 times forward earnings at the beginning of an easing cycle. So there's only one precedent for such a situation, Denis. So again, we're navigating into unusual waters if you want and on certain waters, I would say when it comes to valuations on the stock market.

Yeah. And we're seeing on that graph that only a two time out of seven we saw the market going down after rates cuts. And you know, it's interesting to see where we are in the cycle compared to the past. But also, the next slide will show us how the market interprets, you know what's going on in term of you know, valuation and volatility. And I would say the first three lines, that's quite busy. But it's quite interesting because it shows, you know, as the market is doing different signals depending on what you look at.

Yeah, so you're right. So that, you know, the blue bar represents the range in which the market has already as traded in the past. The green line, if you want, the green number represents where we are now versus what you see on average in any other episodes. So you can see that valuations, you know, trading at, you know, almost 21 times forward earnings is quite high relative to the norm. The fact that, you know, earnings expectations are at 14% versus normal of 10% means that, you know, we're expecting significant growth in the months ahead. And the stock market has not really corrected historically the Fed starts cutting rates once the stock market starts correcting, which hasn't been the case this time around. So from a stock market, the first 3 bar show that, yeah, there's a lot of good news already expected in the stock market.

And at the same time, the last three bar are giving a different signal. The one what we call the MOVE is the volatility on the bond market, the VIX is the volatility on the stock market and after that the corporate spread and all of those data are, you know, below the line.

So historically the markets a little bit nervous because you know, the Fed starts cutting rates because maybe something's happening to the economy. So this time around the stock market is already concluded that this is a soft landing and other markets are saying it's going to be a perfect soft landing with no volatility. You can't get more perfect than this Denis because volatility for bonds or for the stock market is well below the historical average and corporate spreads are the least stress we've ever seen at the beginning of the easing cycles. So again, there's a very strong conviction in the markets that the soft landing is mission accomplished, and it only gets better from this point on.

Yeah. And but, you know, there's probably cloud above our head because when you look in the United States, you know, the very small business optimism is not there.

Yeah. So small businesses in US, and we said it before, the uncertainty index is important to look at because they account for 50% of job creation. So I do recognize that the latest jobs report in the US was stronger than expected. But, you know, it seems like it broke the trend from the past six months to me. But I don't think, you know, one month makes a trend. So we'll have to see another good employment report before we change our mind on a potential stress on US labor markets that could undermine profit expectations. But I have to say, people always claim that an election year is good for equities. It's been the case so far. I get this, Denis. But at the same time, we've never seen so much uncertainty prior to US election, and that's quite evident in this slide. So my point, Denis, here's, yeah, if we are going to change our view on the US economy, let's wait for another jobs report. But more importantly, let's wait for the result of the US election and to see whether it's contested or not by one of the two candidates. Both candidates could also contest. We'll see that, Denis. So I think, you know, going into the US election, we've never seen so much uncertainty. And at the small business level, that should transpire theoretically with less aggressive hiring. But let's see the next job report to see if I'm right or not on that one.

Yeah. And we won't wait too long because all of this will happen the beginning of November, then we'll know more really at the start of November about that.

When we meet next month in person, then we will be able to assess the whole situation.

Yeah, might be quite different. But if you come back in Canada, you know, the story is a bit different where, you know, the economy is not doing so well.

Yeah. So people are uncertain about this, you know, the health of the US economy. I have strong conviction that from a Canadian perspective, we're not that great. It's pretty weak. If you look at the manufacturing sector, it's stagnation. If you look at the service sector, it's contraction. So I know the latest jobs report in Canada, like in the US, was better than expected. But I think the uptrend on the unemployment rate is still intact. And that suggests that the Canadian economy is underperforming, Denis. So yes, we're looking at yet another quarter of weak growth in Canada. It's not a recession, Denis, don't get me wrong, but it's still below potential growth and it's underwhelming. And underwhelming growth means higher unemployment in the months ahead.

But probably more and bigger rate cuts have to come in Canada.

Yes, Denis, because underwhelming growth means that inflation is coming down quite significantly in Canada. So headline inflation surprised everyone at 1.6% only in September. Notice on this slide Denis, if you exclude the mortgage interest rate component, which you know the cost of financing your mortgage inflation is only at 1%. But Denis, if you exclude shelter on which the Bank of Canada has no control because of surging population growth, we're at 0.4%. Denis, that is extremely low, I cannot justify keeping rates where they are right now in Canada. I have to up the ante on rate cuts in Canada, 25 basis points is just too slow, they have to move to 50 basis points increment. And that's where the whole Canada.

But if you go province by province, some provinces are not that great too. They are in deflation situation right now, in territory of deflation.

Yeah, actually it's a good point. If you exclude, if you look at inflation, excluding shelter, it's at 0.4%, so anemic at the national level. But there are 4 provinces we're actually talking about deflation. So prices actually coming down if you exclude the shelter component. Those four provinces, Denis, it would be Quebec, Manitoba, New Brunswick and Saskatchewan. So you rarely see so many provinces showing deflation. So as I said before, the Bank of Canada, despite the rate cuts, monetary policy is overly restrictive. They need to start cutting rates by  basis points increment because now Denis what they've been doing, they've been cutting rates, but inflation is falling faster, which means that you're not you're not moving the needle on real interest rates. So 50 basis points would be my best guess for next week and another 50 basis points after that. We got to come back to % very quickly to help the economy for next year.

Well, on that positive note for consumers. Thank you very much for being with us, Stéfane. And hopefully next time we'll be close together in the same room. And thank you all for being with us. We'll see you next month, beginning of November.

Thank you.

Hello everyone. Welcome to Economic Impact. Today is September 10th, 2024 and as usual, I am with our Chief Economist, Stéfane Marion. Good morning, Stéfane.

Good morning, Denis.

So, since the last time, we see the performance from the asset classes being a bit different. Since the last time.

Since we last time we saw each other, was in July at the beginning of Q3, right, all asset classes were rising. We were arguing for potential volatility. And now near the end of Q3, we can see this volatility has actually occurred, or more dispersion I should say with respect to the total returns of different asset classes. Note that the S&P TSX was really trailing behind all the other equity indices, actually leading in the third quarter, but followed by the bond market. And maybe the biggest difference, Denis, is the underperformance or lack of performance, negative performance from the S&P 500. So that's a big change from the start of the third quarter.

And because of that, we saw the volatility increasing quite a lot.

Well, yeah, you know, the negative return was triggered by a surge in volatility in August. Note on this slide that if you exclude the pandemic episode, we haven't seen volatility - VIX - at 40 since 2015. So about a decade, 9 years. And that means Denis that people are now second guessing what the actual outlook will be like. I would just remind you that at this point in time, there's still 80% of investors that are bidding on a soft economic soft landing for the US. We'll see what happens. But clearly there are some investors saying, well, maybe things are not so clear cut going forward.

Yeah. And I think the Fed not decreasing rates makes that volatility is getting higher and higher because, you know, people are expecting those rates going down and they're not coming down.

Yeah. Do you know how long it's been since the Fed last cut rates, Denis?

Long, long time.

Well, since their last rate hike, it's been now 12 months. Historically, that's very, very long because on average, the Fed will cut rate seven months after its last rate hike. Now it's been a year. We're going to get one probably in September. But note on this slide, what the big difference is between this time around and previous cycle is that the unemployment rate is up almost a full percentage point. Well, 0.7 percentage point, which is much bigger in terms of amplitude than what you normally see in a typical cycle, which is the blue line on this slide.

Is that what we call the SAHM rules?

If you want to speak to economics jargon on that one. OK, fine. I'll summarize what the SAHM rule is. I'll simplify it. Normally when the unemployment rate that rises 1/2 percentage point above its cyclical low, you trigger what you call the SAHM rule. And historically it's been associated with a significant slow down of the economy and more often than not a recession. So the SAHM rule was actually triggered last July, which brought this volatility that we got in August on the stock market. Now, as I said before, most people still believe all the SAHM rule is misleading us this time around. Maybe the soft landing is still the typical outcome because even the Fed argues that they can achieve a soft landing despite being very late in the game in terms of cutting rates.

And despite the fact that about the Fed are not, you know, moving down on their rates, global inflation is still creeping down.

Now, I will concede that the Fed is able to cut rates now and maybe they will be able to cut rates aggressively because inflation is coming down. As you can attest on this slide, you know, it's a global phenomenon. It's not just a Fed that will be coming cutting rates. It's a whole bunch of central banks. And under the circumstances, if it's a synchronized easing cycle, people believe that, there you go, you're going to get this economic soft landing and earnings won't be impacted negatively.

And at the same time, you know, we're seeing the economy cooling. That means that, you know, earnings and revision may come.

 Inflation does not come down by magic, Denis. So basically, what that means is that for inflation to come down, you have to get slower economic growth. And if you get slower economic growth and you keep monetary policy restrictive, you can get an accident. You know, at some point in time, as you'll see on this slide, the blue line shows that global manufacturing activity is now contracting again. And historically this has been associated with downward earnings revision. So again, the market is priced for perfection right now because you're training at high multiples and the assumption is that, you know, mission accomplished by the central banks, you'll get this economic soft landing and no impact on earnings. But I think an impact, a negative impact is coming if you can gauge on historical relationship between activity and earnings revision.

But then earning growth expectation will have to come down because right now they are still pretty high.

 Yeah. And remember we spoke to this back in July and say, listen, this is a bit high. It was expectations of 14% over the next 12 months. It's been revised a little bit down, but you're still expecting 12%. That's the red zone or pink zone on this slide. 12%, you know earnings per share growth globally, but note that every region in the world is showing a positive uptrend on earnings despite the fact that monetary policy remains restrictive. So we're going to get these rate cuts Denis, but monetary policy is not becoming accommodative anytime soon. So you're going to get below potential growth, which I think will impact earnings.

More to come then on that front.

I think so, yeah.

OK. If we come back to Canada, then you know, GDP still pretty high, but consumption, personal consumption are not there.

Yeah. So, if you focus of course on GDP, you'll say, ah, it was a better outcome than expected, but that's because government accounted for 50% of growth in the second quarter. If you look at consumer spending, the red line on this slide is pretty anemic, Denis. So, and that's impressive when you consider that population growth continues to surge in 2024. So to get the surge in population growth, this and only 0.6% growth in consumption means that your economy is not performing very well. So things are not better than elsewhere in Canada. It's actually it's a pretty tame GDP outcome in Q2.

Would you say that at this time, even if the Bank of Canada lowers rate, you know, before the Fed, they're not lowering fast enough to bring the consumption back?

It's a good question. I mean, the reason consumer spending is so weak is because households must devote 25% of wage increases to servicing their debt because interest rates are much higher than they were a few years ago. So considering all that, considering that inflation's coming down, there's going to be rate cuts. But at the end of the day, what you can see on this slide is that despite the fact that the Bank of Canada has cut rates already twice, the policy rate adjusted for inflation is barely coming down. So, monetary policy remains the most restrictive since 2006. Denis, what that means is expect slower growth in Canada and a higher unemployment rate, which will probably lead the Bank of Canada to accelerate the pace of rate cuts in the coming weeks. So yes, there will be collateral damage to the Canadian economy in the coming weeks. So but the good news, inflation is coming down. They can cut down to cut the rates aggressively, but there's still going to be an impact on earnings in Canada as there will be a negative impact elsewhere in the world.

Would you say that the Bank of Canada don't cut rate as much as they should because of the Fed not starting to do so?

You're right that they were probably a little bit shy of going more aggressively, but probably concerns about the Canadian dollar. But at this point in time, you know U.S. dollar has been weak. So Canadian dollar as hell is ground. So I think that opens the door for more aggressive rate cuts in Canada. Actually, our fixed income strategist who recently published their monthly and we're showing an acceleration of the pace of rate cuts from the Canadian perspective in the months ahead.

OK, now we said all of that. What do you expect has returned from different asset classes.

Investment conclusion, right. So well, Denis, if you trigger the SAHM rule, I'm sorry, historically it's not good for risk assets. So, historically 3 months following the triggering of the SAHM rule and note that this is one of the first time the Fed has not even cut rates despite the triggering of the Fed SAHM rule. You can see that the stock market whether it's the US or Canada, it's down about 9%. The only asset classes that play a defensive role would be gold prices and the US dollar. Gold because more volatility, the US dollar because more risk off environment and clearly the bond market is also somewhere to hide. So investment conclusion, Denis, I think there's going to be more volatility this fall as people reassess their earnings expectation. So it's time to be play a bit more defensive in our opinion. And just those US elections coming up, most uncertainty about policies, keep that in mind also.

Well, thank you, Stéfane, and thank you for being with us today. And above all, we expect to be with you next month, beginning of October. Have a good day. Thank you.

Hello, everyone and welcome to Economic Impact. Today is July 11, 2024, and as usual, I am with our Chief Economist, Stéfane Marion. Good morning, Stéfane.

Good morning, Denis.

Once again, we're going to start with the performance of the stock market. It's going well, huh?

Yeah, it's been a hot summer, not just temperature wise. Stock market is on fire. We have records pretty much everywhere around the planet. Notice, Denis, if we focus on the US it’s 17% up this year, but driven by sectors, 2 sector sectors in particular, it's anything related to IT or technology, media and telcos. Yeah.

And they're doing very, very well compared to the rest of the other sectors.

Massively well. So much so that you know, the market share of the TMT sector now accounts for 40% of the S&P 500's valuation, which is a big deal Denis because we haven't seen this in 20 years. So keep this in mind. It represents 40% of the market cap of US equities, but only 24% of earnings. So there's high hopes that to hear that the this sector will continue to deliver on the earnings front.

And not only analysts have hopes for the TMT sectors, but they have hopes also for the whole economy.

Oh yeah. And it's not just that, you know, earnings will continue to do well. It's actually that they will even do better going into the next 12 months. So economy wide US expectations for earnings to accelerate from, you know, roughly 8% where we are now to growth of 13%. Notice on the slide too for the IT sector, the expectations, as you will pick up speed on the earnings growth and reach a pretty impressive figure in the next 12 months, 20%, Denis. So you better hope that everything is fine.

They're drinking nice Kool-Aid, maybe. If you look at the economy and the news that we have and the data that we're collecting so far, it doesn't show that.

I don't mind if they're doing Kool-Aid, but there might be too much sugar in that Kool-Aid right now. Because if you look at the economic surprise index in the US, then it's the worst reading since 2015. So it's been a massive downward surprise recently. It doesn't mean that the economy is not growing, Denis, it's just growing much less rapidly than what we've seen in the past. And this is what you have to take into context. If your economic surprises are negative, can you actually deliver on better earnings growth? And what history suggests is, given the current reading that we're seeing on economic surprise, which is a 2 standard deviation, historically, earnings are actually revised down as opposed to being revised up. So that's the challenge for equity market price for perfection with an economy that does not decelerate. But unfortunately, that's not what we're seeing right now. Economic surprise suggests deceleration.

Yeah. To make things worse, the labor markets, you know, keep deteriorating.

So this is a topic we addressed in the past. You know, in order to, you know, boost your earnings, if you can't do with the higher sells, you have to increase your profit margins. If you increase your profit margins you might need to reposition your hiring pace. And what we're seeing in US right now is the unemployment rate is on the rise up above 4% for the first time since 2021. So clearly that's a big-ticket item for the economy because that's that 60% of GDP in US is determined by consumer spending. I can tell you that when the unemployment rate is rising, Denis, historically consumer spending does not accelerate.

And to keep going in the same direction. Our leading economic indicator keeps going downward.

Yeah, so this is where we are now. So the unemployment rate would be more coincident. So what about the outlook? Well, if you look at leading indicators in the US and leading economic indicators, it's actually back to where it was at the worst of the COVID recession. So again, Denis, it's just to say that anticipating a better economy in the months ahead might be a challenge because most indicators would suggest a weaker economy, not a stronger economy, which opens the door for rate cuts, don't get me wrong. But will the Fed be able to cut rates aggressively given where we already are and that monetary policy remains restrictive? So again, it's a challenge for earnings growth in the months ahead.

And if we come back to Canada, we'll look at the, you know, jobless rate. Not that good too. Well, it was 6.5% of the national level. But if you want to dig a little bit deeper to look at younger people, 15- to 24-year-old, I mean, you know, it's an unemployment rate above 13% for the first time in a decade so there's got to be some frustrated parents around the table nowadays. And it is an issue. And it does show that once the economy starts doing worse, well, yeah, younger people will be hit first. And this is exactly what we're seeing right now. So there's clearly a deceleration of the economy that's ongoing right now in this country. So let's not be too greedy on earnings growth also from a Canadian perspective.

Yeah. And at the same time, you know, we talked quite a lot about the soft landing. Is it still true? Well, the Bank of Canada has been, you know, going public saying that it's mission accomplished on a soft landing or it looks good for that. I would say, well, depends. Denis, there will always be a landing. I don't know if it's going to be soft or hard, but I can tell you in the GTA right now, the Greater Toronto Area, which is 20% of the Canadian economy, retail sales are actually contracting. And that's a reflection of deterioration in labor markets, restrictive monetary policy, mortgage interest rate resets, right. So yes, the economy is clearly slowing from beginning in perspective. So I don't know yet whether it's mission accomplished on a soft landing or not. I do believe that the Bank of Canada is in position to cut rates a little bit more aggressively in the months ahead. But monetary policy will still be restrictive by the end of this year, meaning the economy will underperform.

And to wrap it up a little bit, you know, we're seeing an economy that is slowing down then probably more rate cuts. But at the same time, we have analysts that have a prediction of pretty nice growth of, you know, revenue of a company or bottom line of a company. We need to be careful here.

Yeah, the next few weeks will be very telling. No, next few weeks will be very telling. We're about to start the earnings reporting season. So let's keep an eye on that. I do believe Denis, as you say that expectations are too aggressive from my standpoint.

We haven't talked inflation yet. It's our favorite subject. Now you're bringing us on what's going on in the eurozone.

Yeah, because you asked me to speak to politicians and I have to speak to politicians I have to speak to inflation at the same time. We saw elections in Europe where the incumbents have been defeated and the parties have been elected, whether it's UK or France, are promising to deliver on services to their people, but I'm just not sure they can be very aggressive on that front. And what that does is when you have these politicians that are promising more fiscal stimulus, well, that keeps your inflation and service component higher, which limits the ability for central bank to cut rates. And Denis that's a reality in the US, in Europe, even from a Canadian perspective, and that brings the great uncertainty as we look towards the next 12 months in 2025, how will central banks be able to cut rates if politicians continue to promise to spend more? And if you promise to spend more, keep an eye on service inflation that will determine the ability of these central banks to cut or not. Right now, I have to say some cuts are coming, but they cannot cut aggressively because of politicians.

OK, on that thank you, Stéfane. Thank you, everyone for being with us today. We'll see you back in September because in August, you know, it's holiday season for us too. Then hopefully we'll see you back in September. Thank you for joining us today.

Hello, everyone and welcome to Economic Impact. Today is June 11th, 2024 and I am with our Chief Economist, Stefane Marion. Hello, Stefane! Morning. How are you today?

I'm good. Thank you very much.

Stefane, for change, we're going to start with rates or inflation?

We've been talking about potential rate cuts for a long time Denis. I don't know how many months it's been. First rate cuts in over four year... Last time we had a rate cut in Canada was the US presidential election. And so be it. We have rate cuts on the same year that we got another presidential election in the US but I don't think it's because of the US election that they're cutting rates.

I don't think so.

Now they're cutting rates because we're feeling the impact of restrictive monetary policy and case in point, profitability of US, of Canadian corporation has been declining in recent months. So yeah, I think it was time to cut rates. And at the same time, we're seeing a private employment kind of a stagnation. Well, I used to think policy makers or politicians don't like to admit if you don't have profits in your economy, there's a good chance that private sector employment won't do well. And the reality is with lack of profits, we've seen some stagnation in terms of private sector jobs. And you know Denis, the latest employment report in Canada show that on a monthly basis, the month of May was not very good, with seven of 10 provinces reporting a decline in job creation. It's actually outright job contraction. So yeah, you know what? It was time to cut rates.

And once again, when you're looking at the inflation, you know the ex shelter is still going down. Yeah, so I will admit to the fact that I know you're asking me that. Can I just look at employment? No, the BoC actually targets inflation, not the level of employment or the unemployment rate. And when you look at overall inflation at 2.7%, you could argue while it's still well above the 2% target, however, it's really is a shelter component that's driving the show. Excluding shelter 1.2%, yeah, the bank account was justified to cut rates. And who knows they and I do believe this is going to happen with rate cuts. You might entice property builders to bring us more supply of housing, which is desperately needed in Canada at this point in time.

That's quite interesting because lowering rates sometimes doesn't mean that you know the inflation will go down. Now it's the case because you're going to build more houses and probably that component will go down and it will help.

Permit and process the need because it's the first time that the Bank of Canada faces an environment where shelter is decelerating, where our shelter is accelerating. You never see this. But we've never seen this type of demographic growth or population growth. We've been speaking about that in 2024, it's going to be a very big year in terms of population growth. So yeah, it's an experiment in process. So I think you can think that those rate cuts, but it might entice more supplies. So let's see what happens in the coming months. And to add to all of this, economic data are not that good. No, not on the other side of the border in the US. So you you can see the Canadian side was decelerating. And in US as our main training partners still to this day, economic surprises have turned more negative in recent weeks. So clearly the impact of restrictive monetary policy is now being noticed in the US. And at the same time, US full time employment is going down. Yeah, so total employment was above expectation in May, but guess what full time jobs were down for the, I think the fifth time in six months and then you were down 1% year over year. It's a decline that's never been observed in the US outside the recession. So I think this is where corporations are also trying to protect the profit margins. They're hiring, but they're no only hiring part time, which doesn't speak to superb economic growth for the second-half of the year for the US. And with all of those good news that should bring rates down in the United States. Inflation is still high. Yeah. No, the Fed is handcuffed right now because we've had 4 consecutive months where the monthly change in inflation on an annualized basis is well above the 2% target, you know that the Fed would like to see. So no, you can't cut rates aggressively right now. So even though the job market is slowing down, the Fed is handcuffed. It's unable to provide fiscal or monetary stimulus as quickly as Canada. This is where we're seeing a big difference between the inflation in Canada and the inflation in the US. You know, the, let's say the data are different, the components are totally different, The source of inflation is different. In Canada, 70% of inflation is driven by supply issues, mostly because of the shelter component of CPI. In US it's only 30%. So 70% is driven by demand factors, which has been stimulated by this fiscal policy in the US. This is the US election year. So they've deployed the most aggressive fiscal stimulus in U.S. history with the unemployment below 4%. That generates inflation. Yeah, for sure. And at the same time, you know, to make things even worse or more difficult to predict, we see the shipping costs going up once again. So, you know, we've said before you have to manage your portfolio risk, but you have to have to manage uncertainty because of politicians. And while with all these fights between countries about, you know, tariffs, protectionism, etcetera, shipping costs are up 400% since the start of 2024. So that makes your inflation outlook slightly more uncertain as these politicians come in with more tariffs. So that's why the Fed can't act quickly. There's some resilience in inflation coming that from these policy maker. And that will affect all country no matter what. I absolutely believe so. So, yes. OK. And now if we talk about performance and return, assets did quite well, except bonds. Yeah, so, so far so good. 2024 has been the first half anyway, has been a good vintage. Every asset classes are up except the bond market. So for Canadian investors, we, we, we've done great this year considering all the challenges, but there's a lot of good news embedded in these, in these, in these evaluations. So I can't promise that we're going to get the same type of return in the second-half this year. Note Denis that what frustrates me on this is that the stock market has done well... Canada, not so good. It's still a positive return, don't get me wrong. But we are trailing the rest of the world when it comes to the performance of our stock market. And we tought just at our last Economic Impact, you know, and this time, once again, we see the gap going wider. Yeah. So the reason we're not performing as well as the other stock market is because the S&P/TSX is not seeing multiple expansion as aggressive as what we see elsewhere, so much so that we're trading in the second quarter of this year right now, where we are now at a nearest direct discount to the US. So yeah, hopefully we'll do better in 2025. Clearly, this is abnormal and reflects some unease about the Canadian economy. And with that data and that statistic, you know, we can translate that with investor demand in Canada and we see that the investors are not buying canadian asset. Yeah. So, yeah, there's a discount, no multiple expansion is because we're facing continued outflows from foreign investors. So if you look at net foreign purchases of Canadian equities, they've been on a trend decline since 2023. So 18 months, Denis. Hopefully the worst is behind. We're getting rate cuts in Canada that should stimulate profits and hopefully 2015 will show a better year in terms of economic policies. It's an election year. We're going to get fiscal stimulus. So hopefully we do better because clearly this is a trend that has never been observed outside the Canadian recession. So surely things are better than that in Canada. We'll see for 2025. OK, We start with rate cuts. We have to finish with rate cuts. How many rate cuts and where's the floor? So, I would think that maybe we can go, two to three times more by the end of this year. Monetary policy will still be restrictive. Now you're asking me how low can we go? I don't think we can go much lower than 3% Denis and again, the geopolitical backdrop argues for maybe stick your inflation globally. And as I said before, the reason why we see maybe less rate cuts in 2025 or the pace of rate cuts is more uncertain because we're going to get this fiscal stimulus in 2025 in Canada. So, ... good news, Denis, yes, more rate cuts coming this year and let's not be greedy on how many we're going to see though. OK, well on that, thank you, Stefane. Thank you everyone for being with us. Hopefully we'll see you next time in July. See you.