Market Outlook 2018
Wednesday, 14 February 2018
Market Outlook
U.S. Economy & Long Term Interest Rate Outlook
  • Economic Cycle Research Institute has the best record of predicting recessions through their Weekly Leading Indicators (WLI).
  • WLI reading has been recovering modestly but growth is expected to disappoint the consensus which is calling for continuing strong U.S. GDP momentum.
  • Softer U.S. GDP growth in the second half likely means a bond market rally in the latter part of the year, which will be good for the interest sensitive equity sector.
  • Real M1 numbers, however, for G-7 and E-7 nations suggests firm global GDP recovery at least in the first half of 2018, which is good for a trading nation like Canada.
  • NAFTA abrogation risk is rising. Would mean slower Canadian GDP growth, a lower Canadian dollar but his would help the commodity segments of the TSX.

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Market Outlook Q3 2017
Monday, 06 November 2017

Market Outlook

U.S. Economy & Long Term Interest Rate Outlook

  • Economic Cycle Research Institute has the best record of predicting recessions through their Weekly Leading Indicators (WLI).
  • Current WLI reading has been deteriorating since peak in February but not in recession territory (last 2 weeks have seen a reversal to the upside). Note: nine out of last ten bear markets coincident with a U.S. recession.
  • Softer U.S. GDP growth in the next couple of quarters likely means a bond market rally in the ensuing months, which will be good for the interest sensitive equity sector.
  • Real M1 numbers, however, for G-7 and E-7 nations suggests firm global GDP recovery through first half of 2018, which is good for a trading nation like Canada.

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Market Outlook Q2 2017
Wednesday, 07 June 2017

U.S. Economy & Long Term Interest Rate Outlook

  •  Economic Cycle Research Institute has best record of predicting recessions through their Weekly Leading Indicators (WLI).
  • Current WLI reading suggests improving economic growth in last three quarters of 2017 and no recession (see sharp turnaround in last fifteen months). Note: nine out of last ten bear markets coincident with a U.S. recession.
  • Upside in 10 years U.S. Treasury yields this year likely in the region of 2.80-3.00%, thus over half of the rise is behind us from low of 1.37% in July 2016.
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Market Outlook Q2 2016
Wednesday, 25 May 2016

Short Term Risk/Long Term Opportunity

Short Term Risk

  • U.S. likely in latter stage of cyclical bull market given profits recession.
  • Warning flags for U.S. market: Declining breadth S&P 500 was largely held up by performance of Facebook, Amazon, Netflix and Google (in spring of 2000, same phenomenon with Microsoft, dell, Cisco and Intel).
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