Market Update - Brave New World

Posted: Thursday, February 21, 2019 - 10:01 EST

Summary

  • Geopolitical issues are increasingly dominating markets. This is exacerbated by the rise of algorithmic trading.
  • Political issues, such as the rise of populism and de-globalization, are dampening economic growth.
  • The global economy has slowed. North America is still reasonably strong, but Europe, China and Japan are all weak.
  • Canadian crude oil prices have recovered, but the associated equities have not, due to investor aversion to the country’s energy sector.
  • Market valuations for the U.S. and Canada are attractive, assuming corporate earnings growth remains strong.
  • We seem to be back to an environment of slow growth and low rates. This is positive for equities, but we see heightened tail risks and are adjusting our portfolios accordingly.

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