Articles

The Week Ahead

Canada's inflation rate took a bounce higher in May, and barring some downside surprises, the "core" rate tracked as a trend variable by the Bank of Canada will run above 2% by the third quarter. In contrast, growth has taken a swan dive, with no gain in GDP for April, and evidence of softness in May pointing to not much better than 1% growth for the second quarter. Learn More

Monthly World Markets Report

Are We There Yet? In the May issue of Monthly World Markets Report, we provided several reasons why we believed equity markets could experience a pullback of as much as 10%-15% and, thus, why investors should lighten up on equities. Our concerns included tightening global monetary policies, the weak U.S. housing market, the ongoing issues related to heavily indebted global governments, oil prices near US$110 per barrel, the economic impact of the Japanese crisis and slowing corporate earnings growth. While all these issues contributed to the subsequent equity market weakness, it was the Eurozone's sovereign debt issues that pushed their way to the forefront of investors' minds. At its lows in June, the S&P/TSX Composite Index was down 10.4% from its peak of the year. Learn More

Economic Insights

Global growth is likely to come in below 4% both this year and next, a significant downshift and below consensus estimates (see pages 3-7). But even that call is dependent on the vagaries of politics. Perhaps it's political naïveté, but on three key fronts, we're relying on politicians to "do the right thing". Given the uncertainties, it's worth exploring a few "what ifs" on other potential outcomes should political rationality fail us. Learn More

Index Return Monitor

Is QE3 Around The Corner? With the U.S. Federal Reserve's (Fed) second quantitative easing program set to end in June and considering the recent spate of disappointing economic data globally, the question top of mind for investors is: will the Fed pursue a third round of quantitative easing – QE3? Learn More

Market Beat

North American equity markets opened higher on positive second quarter China GDP data which exceeded expectations despite tighter monetary policy by the Chinese government. However, the market appreciation accelerated after U.S. Federal Reserve Chairman Ben Bernanke said he was prepared to provide more stimulus to the economy if needed, including buying more government bonds. Learn More