2018 Gets Off To A Strong Start As Fundamentals Remain Solid

Here’s What We’re Thinking

January 10, 2018

Global markets have started 2018 in solid fashion with healthy performances across equities (S&P500 +3.1%; S&P/TSX +0.9%), commodities (WTI crude oil +4.1%, gold +0.9%) and currencies (CAD +1.0%) in the first week of trading. Bond yields are also on the march higher year-to-date with U.S. and Canada 10-year federal government bond yields up by 15bp to 2.54% and 2.19%, respectively. These early gains can be attributed to, among other things, ongoing solid economic growth data and the recently approved U.S. tax cut package in late December, which boosts the corporate profit outlook, in our view.

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Strategy Hits The Mark In 2017

Here’s What We’re Thinking

December 13, 2017

With 2017 coming to a close, we can take this opportunity to take stock of market performance and our asset allocation strategy over the past year. To recap, our strategy has been premised on carrying a large overweight in equities versus an underweight in bonds, an expectation international markets would outperform U.S. markets, and maintaining overweight exposure to cyclical sectors including financials, industrials, materials, technology, energy, consumer discretionary and health care. In the end we find equity markets posted solid returns year-to-date through 12 Dec/2017 (S&P500: +21.1%; S&P/TSX: +8.1%, all in local currency terms) while fixed income struggled to keep its head above water (U.S. and Canada: +3.3%).

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