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Markets, says the old adage, are always climbing a wall of worry.

They’ve been doing it very successfully since April of 2020 with all the major North American indexes hitting new highs in the months following the March pandemic crash.

The big question is: How long can it last? As summer winds down and autumn approaches, that wall is looking increasingly difficult. Here are some of the bricks that are making it higher and harder than ever.


Last spring, when the vaccine roll-out started, most people thought the pandemic would be over by now. Instead, we are into a fourth wave, driven by the Delta variant that is hitting hard at the unvaccinated. Cases are surging in areas where public health measures have been rescinded, such as Florida, Texas, and Alberta. With children going back to school, the potential for further spread multiplies.

Low vaccination levels in goods-producing developing countries are adding to the problem as factories close down, disrupting supply chains.

No one wants to think about more lockdowns and their impact on the economy, but we’re starting to see them in some parts of the world, such as New Zealand, Vietnam, and Sri Lanka. None of these are major contributors to global GDP, but if the Delta variant causes larger nations to reimpose restrictions the impact on the fourth quarter could be significant.

One investor presentation I watched last week also noted that the Delta variant is hitting consumer confidence and the willingness to spend.

Monetary easing

The stock market has been supported by accommodative central banks, particularly the U.S. Federal Reserve Board. Interest rates remain low and are unlikely to rise before 2023.

However, the Fed has signalled it will soon start to scale back its quantitative easing program, the first sign that the support pillars are being gradually pulled away. The Bank of Canada and the Australian central bank have already acted. These moves have already been priced into the markets, but any acceleration in the process may spook investors.

Supply shortages

It’s now estimated we won’t be back to a supply/demand balance in computer chips until 2023. That means thousands of cars and trucks not being built and higher sticker prices for those that do make it off production lines. Makers of smartphones and computers will struggle. The Wall Street Journal reported that Hewlett-Packard has raised the price of printers by 20 per cent because of the chip shortage. This problem will weigh heavily on markets the longer it continues, especially car and technology hardware manufacturers.

It’s not only computer chips that are in short supply. The Globe and Mail reported last week that a wide range of importers are having problems ordering new stock and facing high shipping prices when products become available.


Consumer demand and product shortages lead inevitably to rising inflation. Is it just temporary, as the Fed and the Bank of Canada keep insisting? Or are the price increases we’ve been seeing a harbinger of worse to come? If so, that could force the central banks to move sooner than expected on raising interest rates, which would be bad news for the stock markets.

Labour shortages

This is not something we expect at the end of a slow-growth period, but many people don’t seem to want to go back to work. Several theories have been advanced for this, including overly generous government benefits, fear of contagion at the office, reluctance to work for minimum wage, etc. The hospitality industry is being hit especially hard by this, slowing its recovery.

High prices

You’ll hear arguments to the contrary, but the reality is that most stocks are expensive and trading at elevated price-to-earnings levels. This hasn’t stopped buyers yet although if you look at a chart of the S&P 500, you’ll see the rate of growth has slowed in recent weeks.

There are a lot of bricks in this wall of worry. The final months of the year will test the resiliency of investors.

Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters. For more information and details on how to subscribe, go to

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