RBC Global Insight Monthly - June 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:
Longevity: Cracking the aging code
Emerging technological advancements are driving innovations all around us, transforming how we live, work, and interact with one another, today and in the future. RBC Wealth Management’s new “Innovations” series examines these agents of change and how they can open up compelling investment opportunities.This inaugural report in the series focuses on scientific advancements related to aging. Science is developing ways to slow, stall, and possibly even reverse aging. We explore the most promising advances and the link between scientific breakthroughs and intriguing investments.
Global equity: Firm footing—for now
Solid uptrends suggest stock market advances could have further to run. However, we think a more challenging environment for equity markets is not out of the question.
Global fixed income: Disinflation disappointment
As disinflationary impulses have dissipated, rate cut expectations from central banks have followed close behind. Projections for many cuts have been reduced to only a few, with inflation as the primary culprit.
Special Event: Women, Wealth & Wine
Insights to equip and engage you on your financial journey
Whether you’re building a career, working inside the home, partnered, married, divorced, widowed or solo, it’s important for you to take an active role in your financial life. At RBC Wealth Management, we are committed to delivering insights that educate, equip and engage you on your financial journey.
Please join us for this special event where we will be joined by an expert panel of female professionals who will be discussing the unique and various challenges faced by women investors that underscore the need for wealth planning.
- When: Thursday, June 27th
- Time: 4:30pm - 6:30pm
- Location: 36th floor - 1055 W. Georgia St., Vancouver
RSVP Required-Click here for more details and form to register
Canada’s Housing Market Outlook
Canada's housing markets in a holding pattern
Buyers remained in a wait-and-see mode in May with an interest cut looming around the corner. Little action took place transaction-wise in most major markets according early reports from local real estate boards. Home resales in fact slipped from April levels in most cases when adjusted for seasonal factors. Bottom line: the broad recovery that started late last year essentially stalled this spring.
RBC Economics’ view is it will take several cuts to pull a critical mass of buyers from the sidelines. Prices are likely to stay flat until then and appreciate gradually thereafter. But with so much pent-up demand out there, it’s possible buyers jump back more quickly, which would set prices on a stronger trajectory.
Economic Update: Interest Rates
BoC starts to move interest rates lower
The Bank of Canada cut its key overnight rate by 25 basis point to 4.75% – the first reduction in four years and after holding the key policy rate at 5% since last hiking rates in July 2023. The move was not a surprise with markets pricing roughly 75% odds of a cut before the announcement.
The reduction this month marked the beginning of the central bank easing monetary policy towards more ‘normal’ levels of interest rates after a prolonged and difficult battle with rising inflation pressures. That still, however, leaves monetary policy firmly in ‘restrictive’ territory – the change in interest rates is the equivalent of the central bank easing off the brakes rather than stepping on the gas.
Federal Budget 2024
Key measures that may have a direct impact on you
Deputy Prime Minister and Minister of Finance Chrystia Freeland released the federal budget on April 16, 2024, against a backdrop of Canadians facing the significant challenge of elevated costs of living. In light of the continued economic uncertainty, measures in the budget are targeted with the stated goal of building more affordable homes, making life cost less and growing the economy.
Although there are no proposed changes to the personal tax brackets, the budget proposes an increase to the capital gain inclusion rate. The budget also suggests several amendments to the alternative minimum tax (AMT) proposals, that include reducing the negative impact on the tax treatment of charitable donations.
Complimentary Second Opinion Service
Helping your family build, manage and protect your wealth
If you’re a successful entrepreneur, part of a large family, or a high net-worth retiree/pre-retiree, you may have to manage financial issues that others don’t; This could include inheritances, assets in trust, complex tax planning, or a family vacation property. Perhaps you’d like to put your finances into greater context with your family’s savings, estate and business planning goals. Whatever your personal situation, we are here to help, with a comprehensive review that can ensure your wealth remains “all in the family.”
Our review process typically looks at both your investment portfolio and your overall wealth planning. This way, we can assess your financial situation in the context of your personal tax situation, savings goals, the time you have to invest and other factors such as your insurance coverage or charitable intentions.
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.