April 2017 Market Monitor
Listen to short interviews with Counsel’s investment specialists and get their latest views on current market themes. Market Monitor is hosted by Rana Chauhan, Counsel’s Chief Investment Strategist.
The Feds Raising Rates is a Good Thing.
|The Fed raising rates has been a hot topic. Tim notes that this is a good thing, because it indicates the economy is improving. Growth is no longer as stagnant as it once was. The energy market is in a state of equilibrium and pricing has moved from ‘Cartel-based to competitive’. In terms of valuations, Tim’s views are that while it is not a ‘roaring bull market’, valuations are fair, especially given that things are up 25% from a year ago when people thought they were reasonable. Listen to our interview with Tim.|
Positive signs of broad global recovery
|International small caps are doing well in Asia and developed Europe, Roger says. There is a cyclical pick-up especially in sectors such as Financials and Information Technology; emerging markets are doing better on their fundamentals and currencies are strengthening. Chances of a crash are low in a climate of synchronized global recovery. And while there has been a lot of talk around Trump and his potential impact on global interests, especially trade, Roger’s view is that this impact is overstated. He argues that focusing too much on Trump may well cause investors to miss the opportunities afforded by the recovery we’re seeing now.|
Striking parallels to the ‘86-88 energy markets
|Momentum in the energy sector has been good over the shorter term; and, David sees this continuing, albeit at a slower pace. With Trump’s policies in the U.S., and as China unwinds some of its stimulus plans, there will be a move towards greater stability. An acceleration of growth in the U.S. is theoretically good for Canada, David says. However, if border taxation comes into play, it could be a trade barrier for everyone globally, Canada included. David also expresses some if his concerns in the short term around a slow down of data coming out of China, an economy that drives some of the more cyclical areas of the market.|