National Bank of Canada Eco. & Strat. Team
National Bank of Canada
Highlights
The beginning of 2016 has turned out to be extremely testing for investors. Global equities plummeted in January after ending 2015 on a promising note. A number of indexes have fallen into bear market territory, rekindling fears of a global recession. China, Fed action and the widening of corporate bond yield spreads remain the focus of attention.
At the halfway point of the U.S. fourth-quarter reporting season, the news has been encouraging despite the challenges posed by a surging currency. Though aggregate Q4 earnings are still expected to come in lower than a year earlier, much of that decline is concentrated in commodity-related industries.
Prospects for a sizeable fiscal stimulus from Ottawa, coupled with an accommodative monetary policy and fairly strong U.S. consumer demand, are likely to help the Canadian economy get out of its funk. The outlook for overall earnings in 2016 is still one of improvement.
Our asset allocation is unchanged this month. Since we don’t think global growth is compromised, we are maintaining our recommendation to overweight equities relative to our benchmark. We continue to expect some softness in the USD, implying some lift for commodity prices in the coming months.
This presentation may contain certain forward-looking statements about the 2009 Economic and Financial Outlook. Such statements are subject to risk and uncertainties. Actual results may differ materially due to a variety of factors, including legislative or regulatory developments, competition, technological change and economic conditions in Canada, North America or internationally. These and other factors should be considered carefully and readers should not rely unduly on National Bank of Canada’s forward-looking statements. This presentation may not be reproduced in whole or in part, or further distributed or published or referred to in any manner whatsoever, nor may the information, opinions or conclusions contained in it be referred to without in each case the prior express consent of National Bank.
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