RBC Global Insight Monthly - April 2024
I am pleased to share the latest investment strategy report from RBC Wealth Management—Global Insight, which provides our current thoughts on asset classes, the economy, and timely issues that impact investment strategy. This month’s highlights include:
High expectations
It appears equity investors see clear sailing ahead. The S&P 500 and all other major indexes are at or have recently set new highs. And market “breadth” has led the way. The majority of large-cap stocks have been moving higher, not just the so-called “Magnificent 7.” Expectations for rate cuts are fueling the advance.
Global fixed income: The stage is set
Global central banks took center stage in March amid a flurry of highly anticipated meetings. Though much of the market’s focus remains on when rate cuts start, we see the issue of when they stop as of increasingly greater importance.
Regional commentary
Our regional analysts present their views of markets, as well as how to position portfolios.
Women & Wealth: The future is female
Although inroads have been made, women still experience a significant gender wage gap across the world
The ramifications of women ultimately taking bigger strides into their economic power are profound and far-reaching. Since women exercise their spending power in different ways, compared with their male counterparts, a shift of this magnitude has the potential to influence discretionary spending (e.g., retail, travel), health-care systems and services, and investing.
Canada’s Housing Market Outlook
Mixed start to the spring housing market
March brought a mixed bag of activity to Canada’s housing market. Resales continued to linger around February levels at the national level-still softer than activity that took place pre-pandemic.
As in recent months, activity was largely bogged down in Canada’s more expensive markets (including Toronto and Vancouver), where housing unaffordability is particularly acute. We suspect a standoff between (inflexible) sellers and (budget-constrained) buyers is developing. Widespread month-over-month drops in new listings may be a restraining factor as well.
The Great Rebuild
Seven ways to fix Canada's housing shortage
Too many Canadians are struggling to find a home they can afford—making housing a defining issue of this country’s politics and economics. The crisis now affects middle-income Canadians and extends beyond major cities. It strikes at the core of the Canadian dream of owning a home and is creating intense inter-generational tensions.
This predicament will reach even more alarming levels if not enough is done now. More than half—one million—of 1.9 million new households by 2030 will not be able to buy a home, according to our estimates. That’s equivalent to almost all the households in Atlantic Canada right now.
This report will look at the five phases that led to Canada’s housing crisis, how the challenges are being addressed, and what are the best solutions going forward.
Global currency outlook - Spring 2024
Elevated U.S. dollar defies long-term headwinds
RBC Global Asset Management remains bearish on the U.S. dollar, with our outlook premised on long-term headwinds. A combination of major factors should cause the dollar to decline over the next several years: the currency’s overvaluation, a reversal of capital inflows and the erosion of U.S. fiscal credibility. We expect the early beneficiaries of such dollar weakness to be the euro and the Canadian dollar, while the yen and British pound lag. Emerging-market currencies may initially be held back by central-bank rate cuts but will eventually be buoyed by widespread weakness in the greenback.
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This information is not investment advice and should be used only in conjunction with a discussion with your RBC Dominion Securities Inc. Investment Advisor. This will ensure that your own circumstances have been considered properly and that action is taken on the latest available information. The information contained herein has been obtained from sources believed to be reliable at the time obtained but neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers can guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed as an offer to sell or the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers is to be under any responsibility or liability whatsoever in respect thereof. The inventories of RBC Dominion Securities Inc. may from time to time include securities mentioned herein. RBC Dominion Securities Inc.* and Royal Bank of Canada are separate corporate entities which are affiliated. *Member-Canadian Investor Protection Fund. RBC Dominion Securities Inc. is a member company of RBC Wealth Management, a business segment of Royal Bank of Canada. ®Registered trademarks of Royal Bank of Canada. Used under licence. © 2022 RBC Dominion Securities Inc. All rights reserved.