MARKET OUTLOOK FOR SIA CHARTS
Markets Regain Footing;
After a volatile quarter, global stock markets staged a rally in October to begin the last leg of the year. The U.S. stock market is hovering around the year-to-date break-even level, while the Canadian market has yet to make up for lost ground. On a global basis, equity performance has been flat year-to-date when considering capital gains and up slightly when considering total returns which would include the dividend yield (FactSet, 2015).
Major areas of focus in the market continue to be China and the timing of rate increases in the United States. With China’s leaders meeting this week to devise a new 5-year plan and the Federal Reserve providing an update on monetary policy, this will be an important week. Current estimates suggest China may look to temper expectations on economic growth and set a goal slightly below the closely-watched 7% growth level. In the United States, consensus estimates suggest the Federal Funds Rate will be held at the zero bound with a rate increase not expected until 2016 (FactSet, 2015). We are of the same mindset and believe that global growth is facing headwinds which suggest monetary policy on a worldwide basis will generally remain accommodative.
In our managed portfolio models we are continuing to shift assets away from Canada and into the international arena. Our moves are reducing both equity and fixed income in Canada and relocating these assets to the United States and across global developed markets. We see attractive valuations in Canada after the recent pullback in equity prices, but feel growth prospects in relation to security prices are move favorable elsewhere.
FactSet. (October 26, 2015). Global Indices Data. Retrieved from FactSet Research Systems.
This newsletter was prepared solely by Bruce Morrison who is a registered representative of HollisWealth™ (a division of Scotia Capital Inc., a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada). The view and opinions, including any recommendations, expressed in newsletter are those of Bruce Morrison only and not those of HollisWealth. TM Trademark of The Bank of Nova Scotia, used under license. Morrison & Partners Wealth Strategies is a personal trade name of Bruce Morrison.