If we could focus on a forecast without tariffs, it would probably be pretty good; declining inflation and interest rates, with corporate earnings broadening beyond the “Magnificent Seven” tech names that drove half the S&P growth number for the last two years. However, the new U.S. administration is already making clear it is committed to tariffs as a key trade policy tool.
We had the pleasure of attending both the Economic Forum early January and a full day economic update with one of our fund company partners at the end of January. The forum featured the chief economists of the big 6 Canadian Banks, it is always well attended and attracts the top investment professionals in the country. Our fund company day featured both their global macro economic strategist, their Canadian chief economic strategist, some former Bank of Canada analysts, along with a few of the top portfolio management teams in Canada.
The Economic Club of Canada’s annual panel of economist forecasts event was once again held this January. They highlighted the continued economic risks North America must navigate, namely, inflation, interest rates, recession, commodity prices, geo-political tensions, and housing.
As we approach the end of a whirlwind year it is important to continue to look forward to what is on the horizon. Many of the events of the year have come as a surprise to many, along with how long they have lasted.
An uphill start to 2022: War in Ukraine and Fed rate tightening. The first few months of 2022 have been rough for investors.
The investment landscape during the past couple of years has looked a bit like that of a road trip, complete with detours and bumps along the way.
So much has happened over the last 18 months and the rate of change seems to continuously accelerate. It is so easy to get caught up in headlines, certainly within the economic sphere among many others. These headlines can cause confusion, prompt questions, and cause many people to feel uncomfortable about the future. Will inflation become structural? Is the market too high? What happens if the market has a correction? Have I saved or am I saving enough to outpace the rising cost of living? These questions are normal, natural, and relevant at any stage of life and during any phase of an economical cycle.
It has now been more than six months since the World Health Organization declared the global COVID-19 pandemic, upending our home and working lives. As the initial wave of infections subsided and the spread of the virus stabilized through the summer months in most parts of Canada, we adapted to the “new normal.” Heading into the fall, infection rates in some provinces are rising again, raising the possibility of further restrictions to limit the spread of the virus.
It's been a great year for the stock market. But it's been a terrible year for the economy. How does that make sense?
Necessity is the mother of invention. Perhaps the greatest modern example occurred in 1970 when the Apollo 13 astronauts created a carbon dioxide scrubber out of socks, duct tape and a few other random parts floating about their cabin. But isn’t necessity a close cousin of adversity?