RBC Global Insight: September 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. Highlights include:
Harris and Trump on the issues
As the U.S. presidential election campaign sprints to November, the policy agendas of Kamala Harris and Donald Trump are taking shape, and we address the key differences that matter most to the economy and stock market.
Global equity: Cautious chorus
As we near the end of the third quarter, the economic picture still appears blurry thanks to an ample supply of mixed messages.
Global fixed income: “The time has come for policy to adjust”
The first Fed rate cut since 2020 appears likely, the only question left to answer is how large it will be.
Business Owner Presentation Series
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Canada’s Housing Market Update
Rate cuts have yet to pull Canada's housing markets out of their slump
The Bank of Canada’s rate cuts have yet to pull housing markets out of their slump. Markets’ reaction so far has been largely muted. Early reports on August home sales showed only small increases from July in most markets, including Vancouver, Calgary, Edmonton, Toronto and Montreal. These came on the heels of mixed results in June and July. It will clearly take deeper rate cuts to stimulate demand in a material way, as buyers continue to contend with high ownership costs and poor affordability.
Special Report: U.S. Elections
The realities of U.S. presidential power
The media, both mainstream and alternative varieties along the ideological spectrum, are adept at elevating the importance of U.S. presidential elections and amplifying policy differences between the two major candidates. The person occupying the Oval Office certainly has great influence and can help or hinder the country’s economic progress. However, many other factors also determine economic activity and U.S. asset class returns.
We think the U.S. stock market is usually less impacted by presidential achievements and missteps than investors might think.
Interest Rates: Canada and U.S.
Both the Fed and GoC switch gears
U.S – Fed rate cuts on the horizon: As U.S. rate cuts near, history shows stocks and bonds often perform well after the Fed starts easing cycles, with equities showing greater variability. Given mixed economic signals, the focus should be on quality in portfolio positioning.
Canada – Bank of Canada cuts interest rate, hones in on downside risk: The BoC lowered the overnight rate by 25 basis points on September 4th for a third straight meeting, adding to cuts in each of June and July. The move was in line with market and our own expectations ahead of the announcement.
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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.