BMO Harris Private Banking May Market Outlook: Global Economic Health Yields Positive Growth for Canada
- However, Canadian economy will likely lag that of the U.S. over the next year - Gold prices drop, but still overvalued - U.S. equity markets continue upward trend - Return on bonds driven more by term exposure than by credit type
(firmenpresse) - TORONTO, ONTARIO -- (Marketwired) -- 05/22/13 -- Despite recent fluctuations in gold prices, the global economy is in relatively good health, a sign that bodes well for Canada, according to BMO Harris Private Banking's May Market Outlook Report.
"For the last two to three years, broad trends have driven commodities to perform as a homogeneous group," said Daniel Theriault, Chief Investment Strategist, BMO Harris Private Banking. "The subsectors - precious metals, base metals, agriculture and energy - are now decoupling, which could have positive implications for Canada's economic outlook."
Highlights from the report:
Gold Prices Stirred, Not Shaken
Gold prices are one indication of the global economy's health, with high prices typically suggesting that investors are anticipating inflation and should seek a safe haven to protect their assets. According to the report:
"While the U.S. dollar has currently replaced gold as the primary reserve currency for central bankers around the world, both gold and the greenback are important to investors as stores of value," said Mr. Theriault. "There is a caveat, however: investors should be wary of purchasing gold above its long-term, inflation adjusted price."
U.S. Growth Pushes Forward
Equity markets in the United States continued their upward trend in April, adding to impressive gains in the first four months of the year. However, the report noted that the economic data was less upbeat:
Canada's Lacklustre Market Performance
"In Canada, markets slumped by 2.07 per cent, bringing the overall return for the year to 1.2 per cent," said Mr. Theriault. "Most of the underperformance however is linked directly to the materials sector."
The report noted that Canada's economy will likely lag that of its southern neighbour by about a half percentage point over the next year or so. Furthermore, as the U.S. Federal Reserve will be keeping interest rates low, and continuing to do so for the remainder of 2013, the Bank of Canada will likely follow suit.
Fixed Income Performance
April was an interesting month in the world of fixed income, notes the BMO Harris Private Banking report:
"Investors are still anxious about Europe's debt woes and cooler economic growth in the U.S.," said Mr. Theriault. "Deflationary fears are resurfacing, and that will continue to impact the bond market."
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Datum: 22.05.2013 - 10:00 Uhr
Sprache: Deutsch
News-ID 262343
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