Few Near‐Terms Catalysts for Canada; Modestly Better Opportunities Abroad

Here's What We're Thinking

July 28, 2015

A second interest rate cut this year by the Bank of Canada has confirmed our suspicions that the Canadian economy should continue to lag many of its peers this year. Indeed, Canada’s equity market is alone among G7 countries to have a negative YTD performance. Low commodity prices, decelerating economic growth, a richly‐priced housing market, and the upcoming federal election (see below) are among reasons that are deterring foreign investors from investing in Canadian equities at this time. While some non‐resource sectors in Canada remain attractive from a dividend yield perspective, opportunities for growth are increasingly outside Canada, namely Europe and the U.S.

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