Fall is upon us, trees are shedding their green vibrant leaves and preparing for a cold winter. The market has taken a similar approach with a charismatic Barak Obama stepping out of the oval office as investors prepare for a change in leadership. While it does feel as if the world is being put on hold, there actually are things going on around the globe. The United States put on a scary Halloween mask (Donald Trump’s face), but under the costume, it continues to add jobs and push wage growth. This is leading to an increase in home sales and inflation. The market has not reacted favourably as investors continue to get defensive regarding a possible Trump win. After oil was the largest driver last month, it has cooled off quite a bit as production continues to grow. This is expected to be addressed as OPEC is looking to put in a production cap at the end of November. But until something gets implemented it will continue to take its toll on Canada’s economy as it is also not seeing any job growth and its GDP has slowed as a result. The numbers coming from the US continue to be strong, governments continue to create favourable investment environments and there is room for economic expansion. Hopefully, after the US election, the fear in the market will be reduced and the market can move upwards along with the US economy.
Market Review for September 2016
Oil Increase Trump’s the Market
This month felt like I went to a water park, but instead of excitement, the only thing that was open was a lazy river as not much happened in the way of volatility in the global markets this month, in a traditionally underperforming September. Canada’s economy rebounded recently as exporters saw improving sales and our trade deficit decreased again for the 2nd consecutive month. But to highlight, Canada is still suffering from a poor economy for most of the year as employment has been the decline. The biggest news has to be OPEC’s decision to finally step in and cut production. We won’t know this for sure until November 30th when OPEC reconvenes and discusses all the details. Lastly, the Presidential debates occurred with the majority of critics stating that Hillary won the first debate with ease, often staying in line with her prepared message and just letting Trump derail himself. The memorable line had to be from Hillary, when she criticized Trumps economic plan by calling it “Trumped-Up Trickle Down Economics” in which she stated would only help the rich. Saturday Night Live had a great skit of this debate and we highly recommend that you watch it as Alec Baldwin’s performance as Trump is spot on. At the time of writing this, it can be found here: https://www.youtube.com/watch?v=Ukt2j4p_tv4. Looking forward, let’s hope the markets go upward smoothly and does not have Donald’s temperament which he call his “his strongest asset”.
Market Review for August 2016
The Markets Mimic The Olympics Minus The “Bolt”!
The Olympics came to an end this month and it had some similarities with the market. Records were being broken and new highs in the US were being achieved despite relatively light volume and empty seats at some Olympic events. Despite the lack of any economic drama, it was nice to have a boring month opposed to the volatility we have had over the past year. The economic numbers in August were generally good. Even when weaker numbers were reported (retail numbers) the market continued to view it as, “it’s not great, but it’s not bad”, which did not derail the continued upward trend. The combination of slow but steady growth, low interest rates, central bank policies, recovering energy prices and strong US dollar have been the magic recipe for the markets this year.