🎽 Seize the summer while it lasts and get up to 75% off during Old Navy’s clearance sale.

🏨 Take that swimwear you bought on clearance and enjoy it poolside at your favourite hotel when you get up to 30% off at hotels.com. 

👡 And don’t forget to pack your favourite pair of stylish, waterproof Crocs, on sale now for a limited time!

A new report from research and management firm Morningstar shows that only 48% of the revenue streams for Canadian equities are sourced domestically. In other words, your investments could be getting more globalized – whether you know it or not. 

Driving the news: According to Morningstar, Canada is joining the likes of the United States, Japan, and Australia as its companies’ revenues become more internationally focused. 

• The Bank of Montreal, for example, saw the majority of its revenues in 2022 coming not from Canada but the United States. It’s a first for the storied bank and a surprising shift as Canada provided about 60% of revenues just a year prior. 
   
• This pivot to foreign markets mirrors a similar trend showcased by American mega-firm Meta, which now reaps the bulk of its revenues from the Asia-Pacific region.

Catch up: Globalization took a beating at the beginning of the pandemic, as international trade volumes plummeted and cracks formed in the US-China relationship. But, despite pressures from the Russian invasion of Ukraine, companies are ready to invest in global trade again, which has already surpassed pre-pandemic levels. 

Why it matters: As Canadians, we tend to invest heavily in domestic stocks. Maybe some of that is patriotism, but more of it is likely a preference for what we know and an aversion to the political and economic risks that sometimes come with businesses operating abroad. 

However, this home bias has exposed Canadian investors to other types of risks. 

• Canadians allocate as much as 52% of their equity into domestic stocks, even though they only account for about 3.4% of the global equity market.
   
• Not only does this home bias leave Canadians “overweighted” in their equities, it also pools their money into just a handful of industries, including banking, energy, and telecoms. 

As Canadian companies’ revenue streams become more globalized, the distinctions between domestic and international investments could blur. 

Bottom line: It may be time to reconsider what defines “Canadian” equities – and the sorts of risks (and rewards) that come with investing in them.

🏪 New data shows Canadians spending less. According to an advance survey by Statistics Canada, the effect of recent rate hikes may be pushing Canadians to spend less and save more. Economists had predicted that retail receipts (proofs of purchase used indicating how much has been spent) would increase in May by 0.5%, but they actually came in at just 0.2% for the month and were flat in June. (Financial Post)

🏢 The rent is too damn high. The Canadian Centre for Policy Alternatives issued a report showing that minimum wage incomes are nowhere near enough to afford the average apartment in just about any Canadian city. That news is hardly shocking to anyone scraping by in the big cities, but their findings revealed in concrete terms how the rise in rents has far outpaced real wage increases. (CTV News)

🏭 American factory construction outpacing Canada. American factory investment is roaring back to life, with the amount spent on construction rising 73% year-over-year in 2023. Canada is doing its best to follow suit, investing $12 billion in tax credits and benefits in a variety of critical areas, including clean manufacturing. But once the impact of inflation is considered, Canadian companies are actually investing 20% less than they were a decade ago, while the United States has seen similar investments double since 2021. (Globe and Mail, paywalled)