We are pleased to present the latest editions of the Economic Monitor and the Market Monitor from Dynamic Funds Economics, prepared by Chief Economist Dr. Martin Murenbeeld and Senior Economist William Tharp; a division which provides independent analysis and research to retail and institutional interests from across the globe.
Dynamic Funds Economic Monitor
The Canadian and US economies continue to do okay, with the pace of growth momentarily above trend. In our forecasts earlier this year we had a Fed rate hike around mid-2015, but we removed it last month. The expected decline in inflation was a key reason for scrapping the rate hike, but there are additional reasons for not forecasting a rate increase next year. The global economy is weak. European growth is very meagre, which has forced the ECB into quantitative easing in the hope of avoiding Japan-style deflation. China is struggling with the effects of credit bubbles and financial speculation in everything from commodities to real estate. Meanwhile, Japan is officially back in recession; third-quarter growth failed to rebound after the VAT-induced decline in second quarter growth and inflation is likely to fall back to 1% despite various policy measures that increased headline inflation.
Dynamic Funds Economic Monitor - November 2014
Monthly Market Snapshot
It's The Most Wonderful Time Of The Year - For Investors Too
The Santa Claus rally, as defined by the Stock Trader's Almanac and Yale Hirsch who created it (in 1972), is the last five trading days of the year plus the first two of the New Year. Since 1994, the S&P 500 was lower just three times during this period of seven trading days. That’s not a massive sample size, but it does indicate that there is some efficacy to the idea that the Santa rally is not make believe. A number of behavioural factors are seen as being drivers of the rally – the end of tax loss selling, money manager window dressing, and anticipation of the January effect.
Monthly Market Snapshot - December 2014
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Scotiabank's Global Forecast Update
Scotia Economics provides clients with in-depth commentary regarding the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary and public policy issues.
Stronger Global Growth, But Later Rather Than Sooner
The global economy continues to have difficulty generating stronger growth. There are relatively few large economies whose output growth is gaining momentum, with the United States at the top of a short list. Most countries, the U.K., Canada, and Australia for example, are reporting moderate economic gains.
In contrast, there are an increasing number of nations where output growth is losing momentum. This is evident in the Asia-Pacific region, where the moderation in China’s advance is being compounded by continuing weakness in Japan, and by the further slowing in South Korea and other supplier countries throughout the region. A number of Latin American countries are being squeezed by the softening conditions in the Far East and the ongoing slump in most commodity prices. Renewed slowdowns in Germany, France, and Italy have further reduced activity in the euro zone. Significant downside economic pressures are building in many oil-producing countries/regions in Russia, Africa, Latin America, and the Middle East. Elevated geopolitical risks continue to add to the uncertain outlook, undercutting confidence, spending, and investment.
Scotiabank Global Forecast -December 2, 2014