Economic Data Remains Rosy; Summer Volatility Possibly Ahead

Here's What We're Thinking

May 31, 2017

As global markets close the door on the month of May we find equities handily beat bonds (U.S.: +1.5% vs +0.3%; Europe: +4.5% vs +1.7%) despite a spike in volatility on the back of political noise out of Washington. However, in Canada, risk aversion dominated, leaving stocks (-1.3%) lagging bonds (+0.7%) on the back of growing global investor concern over recent headlines highlighting domestic housing/debt/financial sector pressures. While Canada’s under performance relative to other global markets should unwind itself in coming weeks/months, a pending kick-off of talks to renegotiate NAFTA could maintain bouts of volatility for some time yet.

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