Thinking About What Comes Next Event Presentation
Our March 13th market update events at the Kelowna Golf and Country Club and at Sparkling Hills Resort featured RBC Portfolio Strategist Jim Allworth. With over 50 years in the investment business, Jim provided us with thoughtful and timely insight into current market conditions and global economic trends; "Thinking about what comes next".
Jim's experience through multiple market and economic cycles highlighted the importance of a disciplined approach, professional management, and strategic asset allocation as the key components of growing and preserving wealth over the long term.
If you are interested in attending our client events with special guest speakers, please let us know and we would be pleased to extend an invitation.
An old risk awaits offstage. Trade tensions aren't the only worry. A surge in inflation pressures could upset the economic/investment apple cart.
Jim Allworth | Page 4
Spring Market Update:
The world we live in today often sensationalizes the average news story. And so it is more likely than not that our clients are at least hearing about the volatility that has returned to the markets in 2018 and the “correction” that has taken place thus far. Though, with the exception of Canada, some of the major global equity markets haven’t fared too badly year-to-date. The US S&P 500 is down only 1.1%, Europe is down 2.4% while the Nikkei is up 1.7% and emerging markets are up 3.4%.
2017 could have lulled most investors to sleep with slow steady gains coupled with little if any volatility. However, we knew that historically this was not normal and reduced our Canadian and US equity exposure in mid January and again in mid March in anticipation of higher volatility in 2018. We also feel that bonds are once again providing reasonable yields and are adding fixed income to portfolios to lower risk.
While we acknowledge that the threat of trade wars – the most recent volatility-inducing development – is cause for concern, we believe it is easy to lose sight of the fundamental backdrop for equity markets, which remain favourable for now, in our view. Here are a few of the key points we continue to focus on:
- Solid global economic growth in virtually most key parts of the world and leading indicators that confirm more to come.
- Global monetary policy remains accommodative, though less so than in recent years with Federal Reserve tightening.
- Robust global earnings growth expected for 2018 – double digit in the case of the U.S. (aided by tax reform) and Emerging Markets, and nearly 10% in Canada and Europe.
- Inflation that remains contained for now.
- Minimal near-term risk of U.S. recession based on variety of indicators.
On the issue of trade, it is a situation we continue to watch closely for any signs of it turning into a bigger issue, thereby impacting the growth and earnings trajectory we mention above. We believe the market may be extrapolating a higher probability of a full-out trade war than we believe is warranted. It is worth noting that the tariffs announced yesterday by the U.S. and the retaliatory tariffs unveiled by China on Wednesday will not be implemented immediately. The U.S. tariffs are subject to a comment period lasting through the better part of May after which the administration has a minimum 180-day window to decide whether to actually proceed with implementation. For China’s part, they seem to be taking their queue on timing from the U.S. Lastly, RBC CM Economics has reminded us a few times of late that it seems unlikely the U.S. administration would seriously push an agenda that would materially impact U.S. growth (and run the risk of completely offsetting all the work they accomplished on taxes).
#Macromemo
Produced by RBC Global Asset Management's Chief Economist Eric Lascelles, the #MacroMemo covers what's on our Economic radar for the week.
April 2 - April 6, 2018
Market swoon | Protectionism update | Canada Slows | Data preview
March 26 - March 30, 2018
The protectionism backdrop | Steel & aluminum update | Chinese tariffs | NAFTA update | Data run
Day of Gratitude
As many of you may know I am a big believer in the importance of expressing gratitude. I decided it would be fun to provide each team member with a "Day of Gratitude" in appreciation for all they do to support me and you our valued clients. The spirit of this day was for me to provide each team member with an extra unexpected day off intended to expression of gratitude. Pia would like to share her day of Gratitude with you. I thought you might enjoy how she spent her day.
~Rhonda
Team Member – Pia Garbutt's Day of Gratitude
I wanted to share with you my "Day of Gratitude". My son Darian came to visit me last Thursday for the Easter Holiday. I haven't seen him since last summer so you can only imagine how excited I was to see him. I can't even express how very grateful I was to spend this special day dedicated to just him. We hiked with "Bentley Brown", went for a nice lunch, watched a couple of movies and cuddled on the couch. My husband and I feel so blessed to have raised two wonderful kids and thank our lucky stars everyday that they are both happy, healthy and focused with school ~ chasing their dreams.