In this issue:

• Global Update and Outlook

• North American Update

• 2023 Handy Financial Planning Facts

• Premier Banking

• Chart Corner

Happy new year! The market narrative hasn’t changed much to start the year, with inflation, interest rates, and recession risks still very much front and centre. Nevertheless, there have been some positive developments over the past month that are worth discussing as they have potential implications for investors in the year ahead.

Global Update and Outlook

Overseas, Europe has had a relatively mild start to the winter and it has resulted in reduced demand for heating. Consequently, natural gas prices in the region have fallen significantly, and now sit at levels last seen before Russia invaded Ukraine. That has lowered the odds, for now, of a rather extreme scenario in which Europe would consider the rationing of energy usage, something that investors were quite concerned about just a few months ago. Should trends continue over the months to come, the lower energy prices could provide some disinflationary tailwinds in the region.

Despite the backdrop, a silver lining has emerged in fixed income. While bond returns have been historically weak over the past year, it’s important for investors to focus instead on forward looking prospects. Bond yields are now at highs not seen in well over a decade. As a result, the return expectations from fixed income going forward are meaningfully higher than they have been in quite some time. Importantly, their diversification properties and ability to add ballast to portfolios may re-emerge as an important benefit for portfolios with the arrival of recession-like conditions. Stay updated with our firm's latest: Global Insight 2023 Outlook: Europe .

Meanwhile, in China, there has been a stark reversal of the country’s “zero-Covid” policy, with a complete abandonment of the measures the country had been taking for the past few years. Rather than enforcing strict lockdowns, the country is now in the process of reopening despite the reported increase in infections and strain on its healthcare system. This may result in some temporary disruption from worker absenteeism and supply chain challenges, similar to what was witnessed in North America upon its reopening. Nevertheless, it should prove temporary, and markets are understandably more focused on the prospects for a recovery in Chinese economic growth that could be on the horizon in the not too distant future. Stay updated with our firm's latest: Global Insight 2023 Outlook: Asia Pacific .

North American Update

Closer to home, Canada’s economy added 104,000 jobs in December, more than expected, and its unemployment rate fell to 5.0%. Meanwhile, in the U.S., the employment report showed 223,000 jobs were added in the month, also higher than expected, with the unemployment rate falling to 3.5%. Despite some pockets of weakness and an overall slowing in employment trends relative to a year ago, the rate of job creation remains relatively healthy and normal. Offsetting this positive news was the weakness seen in some leading economic indicators that tend to foreshadow future economic activity. More specifically, readings for the manufacturing & services sides of the U.S. economy declined in December, with the latter being a particular surprise as it had been holding up well through most of the fall. In recent days, the U.S. inflation reading for December was released & suggested an ongoing moderation in pricing pressures. Overall, the data suggests the North American economies are losing momentum but also demonstrating resilience in tightening financial conditions. Stay updated with our firm's latest: Global Insight 2023 Outlook: Canada & Global Insight 2023 Outlook: The United States .

Check out our: 2023 Handy Financial Planning Facts reference guide for important information relating to topics such as:
• RSP deadlines and deduction limits
• TFSA contribution limits
• CPP and OAS benefit amounts

Our team would like to introduce RBC Premier Banking, a fully rebated & tailored banking and credit package exclusive for clients of RBC Dominion Securities with household assets over $1MM. Our team has found it to be invaluable for clients looking for a personalized service to save time, simplify their financial needs, and receive a high-level of service. Your dedicated Premier Banking Advisor will act as an extended member of the Milligan Private Wealth Management Team. In addition, our team & your Premier Banking Advisor will work together to help ensure your investment, wealth management, banking and credit needs are smoothly integrated. In addition to the convenience of having a personal contact for your banking & credit needs, Premier Banking clients receive one of the most comprehensive banking packages, with a fully waived $75 monthly banking fee.

This complimentary banking package includes:

●A dedicated Premier Banking advisor who acts as an extended member of the Milligan Private Wealth Management Team

●Cross-border banking solutions including preferred foreign exchange rates

●Higher daily access limits

●$75 monthly Premier Banking fee rebate

●$120 annual credit card fee rebate

●$50 annual co-applicant credit card fee rebate

●Preferred pricing on fixed & variable rate mortgages for home and investment property

●Other Banking services such as: unlimited eTransfers, personalized cheques, etc.

For more information, go to our Personalized Banking page or contact our team!

~Shawn Milligan | Senior Wealth Advisor | The Milligan Private Wealth Management Team | RBCDS     

             

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