RBC Global Insight: November 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:
Debunking debt disaster
Myths may be im Myths may be important to folklore, but they’re not helpful in finance. We look at the facts behind some of the common myths surrounding the U.S. national debt.
Global equity
Watchful and cautious, but invested - Given the majority of stocks are moving in sync with the broad averages, supported by expectations for solid earnings growth, we think an investment portfolio should stay put (for now) with a commitment to equities at or near its long-term target weight relative to fixed income.
Global fixed income
The beat goes on - Central banks have continued their rate-cutting cycles, some at a faster pace than planned. However, markets are keeping a close eye on Federal Reserve action or inaction.
U.S. Election: Back to the future
Examining policies that may shape the investment climate
The S&P 500 rallied to another new all-time high and other major U.S. indexes jumped as well following news that Donald Trump was once again elected president of the U.S. and Senate control flipped to the Republicans. Trump is only the second person in American history elected to two non-consecutive presidential terms, the other being Democratic President Grover Cleveland in the late 19th century. The fact that there was a clear winner just hours after West Coast polls closed was a relief to equity market participants.
If you’re enthusiastic about Trump retaking the White House, don’t get out over your skis.
If you’re concerned about another Trump presidency, don’t let emotions get in the way of sound investment decisions. Markets have risen under both Republican and Democratic presidents.
Ultimately, over the course of the next four years, we think the U.S. equity market will be impacted more by the natural ebb and flow of the business cycle, Fed policy, and innovation. Washington can influence the business cycle for good or for bad, but it doesn’t control it.
Business Owner Presentation Series
Grow, manage and protect your wealth and your business
Presented by RBC Wealth Management and RBC Group Advantage. Please join us for this series of virtual presentations where we will discuss the services available through RBC for private wealth management and group saving plans for your employees.
RBC Wealth Management services are designed to help you maximize your returns while minimizing risk.
RBC Group Advantage delivers employee-focused financial benefit solutions. Well-designed Group Registered Retirement Savings Plan (RRSP) and Deferred Profit Share Pension (DPSP) strategies help companies attract and retain top talent in their respective industries.
Virtual Presentation Series (Hosted Via Cisco Webex)
* Wednesday, November 27th @ 12pm
Kindly RSVP by using the submission form in the link below or contact us directly at thomas.demello@rbc.com or 604-665-9456 and Webex link will be provided.
Canada's Housing Market Update
October's sales gains an inflection point for housing markets?
Interest rate cuts are finally boosting housing market activity in a visible way across Canada. Early results for October from local real estate boards almost universally showed big jumps in home resales from September. Increases were even greater relative to year-ago levels when sales action was especially quiet in most areas.
For the most part, however, strong seller competition is containing price gains. The MLS Home Price Index changed little between September and October. In Toronto, the index rose marginally for the first time in three months. Prices were still lower than they were a year ago in Vancouver, Victoria and Toronto.
Interest rates: Updates and Forecasts
Canada - Will there be another jumbo rate cut from the BoC in December (Audio)
The Bank of Canada cut the overnight rate by 50 basis points in October—marking the largest reduction since the pandemic. A day later, the federal government announced new immigration targets for the next three years that would drastically alter population growth in Canada. Both of these moves will have a significant impact on the Canadian economy.
US - Future Fed policy decisions still data dependent after 25 bp cut
The Fed continues to signal that more interest rate cuts are likely coming, but the timing (and end destination) remain uncertain. Our own base-case assumption remains two additional 25 basis point cuts from the Fed in December and January before pausing at a 4% to 4.25% range for the rest of 2025 with interest rates needing to stay at relatively high level to offset the inflationary impact of an unusually large government budget deficit.
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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.