- Equity and credit markets have come roaring back as optimism returns, but government bonds are telling a different story.
- This is still a late cycle environment, notwithstanding the difficulties of trying to time any economic rollover.
- The U.S. growth advantage over Canada and Europe has widened, some of this reflecting temporary effects.
- Very low Interest rates and high public debt put policymakers in a spot in any downturn. More unconventional policy will surely follow.
- Canadian yield curve inverts but too soon to call it a recession signal. Also, too many market distortions.
- Our credit views stay cautious. The amounts outstanding, large refinancing needs and weaker credit quality are all signals for caution.
- It is doubtful that global equities can continue to rise unchallenged. Though large falls should be avoided for now, this is a good time for rebalancing away and keeping de-risking initiatives alive.
- Some real assets are helpful strategic diversifiers, but real assets as a group could be coming into their own if inflation concerns surface.
To learn more about the May 2019 Quarterly Investment Outlook for Canada, download the full article above.
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