Stocks were mixed on Friday morning as investors weighed strong earnings reports from major technology companies and positive consumer spending data. The Commerce Department said that U.S. consumer spending rose 5.6% in June, down from 8.5% in May, but above the Reuters consensus forecast of 5.5% growth. The Dow fell 0.5%, the S&P fell 0.1%, and the Nasdaq rose 0.7%. Crude oil rose slightly to $40 per barrel, while gold jumped $28 to $1970 per ounce.

Innovation may be hard to define but, to borrow from former U.S. Supreme Court Justice Potter Stewart, you know it when you see it. The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles, to a large degree - have moved overseas, where costs are lower. Yet the U.S. economy, prior to the pandemic, had expanded to record levels. And now the U.S. Healthcare industry is mobilizing to improve COVID-19 testing, treatments and, ultimately, a vaccine. If U.S. corporations weren't innovating, creating new products and services and moving into new markets and applications, the domestic economy would not have recently completed a 10-year expansion phase before the coronavirus hit, and capital would not be flooding into the country. A couple of statistics should help illustrate our point. Consider that U.S. GDP was approximately $1 trillion in 1930 but nearly $22 trillion in 2019. That's growth of 22-times. Meanwhile, the U.S. population has grown less than 3-times during that time span, to 320 million from 120 million. The delta between GDP growth and population growth has been driven in large part by innovation. In addition, the value of listed corporations on U.S. stock exchanges at the end of 2018 was approximately $32 trillion, representing 41% of global equity market capitalization, while U.S. GDP represented only 25% of global GDP.

Along with the rest of the world, Canada has not been immune to the effects of COVID-19. The Canadian economy has many positive attributes, including the world's third-largest proven petroleum reserves (behind Venezuela and Saudi Arabia). The pandemic took its toll on Canada's workforce, but like other developed economies, the country is seeing a rebound in employment and household income, with a strong 290,000 jobs created in May along with a 6.3% rise in hours worked. Similar to U.S. fiscal-support measures, out-of-work Canadians have been supported by an extra C$500 per week from the Canada Emergency Response Benefit (CERB). We note, however, that the Canadian stock market does have an outsized (relative to the U.S.) weighting in the Financial and Energy sectors, which have been hurt by low interest rates and depressed oil prices. Not surprisingly, the benchmark TSX 60 index has modestly trailed the S&P 500 year-to-date with a 7% decline, versus a 2% drop for the U.S. benchmark. Still, our recent coverage expansion has been finding well-positioned Canadian companies that we believe could benefit in a variety of environments.

The three largest states (California, Texas and Florida) all took steps backward in the reopening process, and that sent markets skidding lower in the trading week ended June 26. As many as 30 states are seeing peak new daily infections, suggesting that the masks came off too soon or, in some cases, were never put on. The following trading session (Monday, June 29), stocks fought back. The market is plainly dancing to the pandemic's tune.

Shopify offers an e-commerce platform primarily to small and midsize businesses. The firm has two segments: subscription solutions (43% of fiscal 2018 revenue) and merchant solutions (57% of fiscal 2018 revenue). The subscription solutions segment allows Shopify merchants to conduct e-commerce on a variety of platforms, including the company’s website, physical stores, pop-up stores, kiosks, social networks (Facebook), and Amazon. Merchant solutions are add-on products for the platform that facilitate e-commerce and include Shopify Pay, Shopify Shipping, and Shopify Capital.