http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/http://www.fxstreet.com/fundamental/http://mediaserver.fxstreet.com/images/fxstreet-provider-logo1-en.gif7http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2012-01-31.htmlThe Equity markets seem to have got some mojo back in the first month of the year. At this writing the MSCI All Country index is up 4.0% year to date. The rally that began in early October has been accompanied by a decline of volatility and marked improvement in sentiment indicators. The reasons for the current strength of the market include easing of monetary policies, better-than-expected indicators in the U.S. and little propagation of the European recession to the rest of the world. TheTue, 31 Jan 2012 16:44:43 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2012-01-31.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-12-22.htmlThe new year begins with trading volumes soft and investor sentiment grim. The risk-off attitude is ever-present and will probably remain so until financial markets see signs that the European peril is truly contained. Europe has slipped into a recession that could become prolonged stagnation. The outlook for the euro zone is gloomy. Not only will debt containment programs crimp credit expansion in the economic union, but demographic trends point to prolonged stagnation of the domesticThu, 22 Dec 2011 22:35:28 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-12-22.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-11-29.htmlHighlights Strategic focus is currently driven more by politics than by economic activity. After months of negotiation the U.S. super committee failed to come up with a plan to restore health to a U.S. fiscal path in need of attention.The lack of investor enthusiasm notwithstanding, economic indicators have given North American policymakers more breathing room. The weakest link in the world economy is Europe, which looks headed for a mild recession. Euro-zone industrial production fell 2.7% inTue, 29 Nov 2011 15:29:42 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-11-29.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-10-30.htmlHighlights Euro area policy makers have provided markets with strong relief in agreeing to provide its members with a set of additional measures to strengthen the coordination efforts of improving current solvency and liquidity problems within the single currency region. The new blueprint does much to eliminate short-term risks as it temporarily removes the uncertainty relating to European sovereign debt and the possibility of contagious effects on the global financial systems. Having saidSun, 30 Oct 2011 23:05:49 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-10-30.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-09-29.htmlHighlights The quarter is ending on a sour note for equity investors with a number of key benchmarks having entered bear market territory, generally defined as a 20% decline. The global benchmark, the MSCI all-country index, is at its lowest level since July 2010. There have been 10 bear markets since 1956 in the U.S., 7 of which have led or were affiliated with an economic recession. Exceptions include 1962, 1966 and 1987. Once the market falls 20% from its peak, history shows us that thereThu, 29 Sep 2011 22:23:45 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-09-29.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-08-25.htmlHighlights Financial markets have been hit with events that have challenged investor confidence and led to a volatile environment for equities. On August 8 the S&P/TSX sank to a low of 11744, down 18.2% from peak. This is the sharpest correction of Canadian equities since the 49.7% slide of 2008, and is close to the 20% decline that is the widely accepted definition of a bear market. A major setback for equity markets has been a string of weak economic data coupled with a downward revisionThu, 25 Aug 2011 22:16:00 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-08-25.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-07-04.htmlHighlights Investors in global equity markets took a sharp turn to risk aversion in Q2. Among the headwinds making investors pessimistic are structural issues like resurgent concern about the sovereign debt of peripheral euro countries, notably Greece, and uncertainty about how the Washington showdown over expansion of the U.S. debt ceiling will play out as the 2012 election year looms. On top of these longer-term issues, weak economic indicators have given new life to talk of recession. TheMon, 04 Jul 2011 15:16:10 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-07-04.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-05-30.htmlHighlights 2011 remains marked with an elevated level of volatility. After gaining close to 3.8% in April, global equities as measured by the MSCI AC index gave up all its gains in May. This setback reflects the uncertainty about the policy response to debt management challenges facing many developed economies. From our perspective, we expect both the European and U.S. governments to agree on a medium term solution to these debt problems. Failure to do so would risk derailing the globalMon, 30 May 2011 22:17:48 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-05-30.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-04-27.htmlHighlights Global equity markets have been remarkably resilient in the face of uncertainty and volatility. Their behaviour is consistent with the scenario we put forward last month to the effect that the Japanese disaster would not derail the economic expansion. The Q1 U.S. earnings season is under way and expectations are upbeat. The analyst consensus currently expected year-over-year growth of 15% in S&P 500 earnings. If it is close to the mark, Q1 will be the fifth straight quarter ofWed, 27 Apr 2011 08:26:52 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-04-27.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-03-29.htmlHighlights Global equity markets have seen significant volatility over the last few weeks, ignited by rising geopolitical risks in the Middle East coupled with an earthquake, a tsunami and their disastrous consequences in northeastern Japan. Japan’s woes are unlikely to derail global expansion. There has been much discussion of the impact of the Sendai earthquake on the Japanese and the global economy. The most certain outcome is a drop in output in the very short term. However, as idledTue, 29 Mar 2011 21:23:07 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-03-29.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-02-25.htmlHighlights Geopolitical risk has resurfaced in recent weeks. At this juncture most of the uncertainty emanates from the Middle East, where long-standing political regimes are being challenged by popular uprisings. The price of oil is trading around $100 per barrel igniting concern on economic growth. We think that a continuation in the recent pace of price appreciation is unsustainable. This said, the current price level is not an economy killer, at least not in the current economic context.Fri, 25 Feb 2011 21:39:41 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-02-25.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-02-01.htmlHighlights The economic and policy environment remains aligned for global growth in excess of 4% this year. We expect emerging economies to continue leading the way, with the strongest expansion. Does this mean emerging-market equities will perform best this year? Not necessarily. True, relative strength in nominal top lines is a key factor in excess return. Yet global integration makes a look at the composition of market indexes essential for picking winners in the multidimensional landscapeTue, 01 Feb 2011 10:22:27 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2011-02-01.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-12-24.htmlHighlights Strengthening international trade flows and soaring domestic demand in emerging markets are supporting the world economic recovery. However, inflation in emerging countries has begun to climb and their monetary policies will need to be normalized in order to bring growth back to more sustainable levels. In that context and with austerity plans in Europe creating headwinds, world economic growth should soften, returning over the next two years towards its long-term average. With theFri, 24 Dec 2010 16:26:50 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-12-24.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-12-21.htmlHighlights Investors enter the New Year with renewed hope. Much of the economic and political uncertainty of the second half of 2010 is behind us and optimism is spreading. U.S. politicians did the right thing by giving medium-term priority to growth over deficit reduction. The last big weight was lifted from a fragile U.S. economy by Congress’s vote to extend all of the Bush-era tax cuts. This move eliminates an apprehended drag on the economy from fiscal policy in 2011. The boost toTue, 21 Dec 2010 14:48:20 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-12-21.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-11-29.htmlHighlights Important developments over the past few weeks have dispelled some of the fog on the road ahead for financial markets. Republicans made large gains in the midterm elections, the Fed has officially announced QE2 and the G20 meeting has run its course. In early November the FOMC announced it would inject another $600 billion into the financial system via purchase of Treasury bonds between now and mid-2011. Just as the U.S. central bank launches efforts to create a more favourableMon, 29 Nov 2010 20:47:45 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-11-29.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-10-29.htmlHighlights Q4 has begun where Q3 left off, with equity markets continuing to gain ground. All regional MSCI indices have advanced in both local and common currency so far in Q4. The Canadian S&P/TSX (+2.0%) has trailed the MSCI North American index (+3.3%). In year-to-date total return, however, the S&P/TSX (9.6%) leads the S&P 500 (5.5%) and the MSCI AC World index (5.5%) in Canadian dollar terms. One of the main developments of the past month is that U.S. Fed chairman BenFri, 29 Oct 2010 21:30:49 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-10-29.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-09-27.htmlHighlights Equity markets rebounded nicely in September, sending the S&P 500 and the S&P/TSX into positive territory for the year to date. However, there is still fog on the recovery track. First and foremost, there is no clear guidance on the extension or otherwise of the Bush tax cuts set to expire at the end of this year. Households remain in limbo as to whether their disposable income will take a hit in three months. Uncertainty about tax policy is weighing on both consumer andMon, 27 Sep 2010 17:53:25 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-09-27.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-08-31.htmlHighlights We continue to think that economic recovery is on track in most of the developed world and that emerging Asia will continue to expand robustly. On the other hand, recent U.S. developments cannot be ignored. Though we trace much of the expected Q3 slowdown in U.S. domestic demand to the unwinding of temporary stimulus, the recovery remains fragile. Fiscal policy is a key source of uncertainty. At this writing the future of the Bush tax cuts, set to expire at the end of this year, isTue, 31 Aug 2010 21:18:26 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-08-31.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-06-30.htmlHighlights At this point in the economic cycle we see no double dip on the horizon, in North America or globally. Those who attach a high probability to a double-dip scenario have generally been arguing consumer deleveraging, credit market weakness and lack of employment growth. We challenge this view. One of the most important factors in the sustainability of this recovery is the strength of corporate earnings. U.S. national-accounts profits are within striking distance of the pre-recessionWed, 30 Jun 2010 08:51:28 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-06-30.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-05-28.htmlHighlights What began this spring as concern about whether Greece would default on its debt evolved into a debate about whether the European currency is there for the long haul. The emergence of increased volatility with the VIX (an index of option price volatility) surging to levels last seen over the evolution of the 2008 financial crisis over the last couple weeks clearly points to heightened levels of uncertainty among market participants. Fortunately, policymakers are showing that theyFri, 28 May 2010 21:03:15 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-05-28.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-03-26.v02.htmlHighlights The global recovery is finally being acknowledged by the consensus and its strength is visible from many angles. The global leading economic indicator continues to gain momentum, suggesting that world output is poised for further robust growth in the coming quarters. U.S. earnings forecasts have been revised up significantly as a result of strengthening economic activity. The consensus forecast of S&P 500 earnings in CY 2010 is up 6.2% since January. Even with this upgrade, weFri, 26 Mar 2010 22:42:11 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-03-26.v02.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-03-26.htmlHighlights Last year’s global equity rebound was led by emerging markets, especially the BRIC indexes. This year the leadership has changed. The MSCI North American index is the top regional performer with a year-to-date rise of 4.5%. Q4 earnings are essentially all in, and the news is good. S&P 500 operating earnings per share jumped to $17.37 – the best since Q2 2008 – from minus $0.09 a year earlier. S&P 500 earnings have now been growing for four straight quarters, the first suchFri, 26 Mar 2010 22:41:43 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-03-26.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-03-02.htmlHighlights Eight months ago we departed from the consensus and took a bullish view of equities. Today many of those positions have been borne out. In the second half of 2009 the economy scored big, both domestically and abroad. Earnings have also been walking the red carpet. Q4 was a second consecutive quarter of very good U.S. profits. With more than 80% of companies reporting, operating earnings for the quarter are the highest since Q3 2007. Top-line growth in 2010 will depend on continuedTue, 02 Mar 2010 10:05:39 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-03-02.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-01-30.htmlHighlights Over the last month momentum has slowed in the stock indexes of both developed and emerging markets. This development has coincided with increased talk of exits from loose monetary policy stances in emerging Asia and with tough talk about the banking industry from U.S. and European policymakers. The U.S. S&P 500 index has corrected 5.1% since its peak of January 19, prompting concern about the sustainability of the bull market and the economic recovery. So far, this correctionSat, 30 Jan 2010 01:47:21 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2010-01-30.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2009-12-24.htmlHighlights Investors have taken heart from signs of economic recovery and corporate earnings growth. The 50%-plus equity rebound that began in March has yet to abate. Can this rally chug right along into 2010? After the worst plunge in decades, U.S. profits are about to rebound on the wings of economic recovery. We are pleased to see that Q3 national-accounts profits were up 11.3% from the previous quarter. And profit growth is essential to employment growth. For the North American stockThu, 24 Dec 2009 11:15:06 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2009-12-24.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2009-12-07.htmlHighlights The upward trend in financial markets remains unabated. The strength of the rebound can be explained in part by the latest economic data, which suggest that the Great Recession has ended in most countries. But lately another factor has been pushing markets higher. Many central bankers have been talking down the need to remove stimulus or mop up liquidity via rate rises. When policy rates are kept very low for a long time, investors are encouraged to sell low-yielding assets and buyMon, 07 Dec 2009 14:36:15 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2009-12-07.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2009-10-27.htmlHighlights From a low of less than 10 times earnings back in March, the stock market rally has now taken the U.S. and Canadian benchmark indexes to more than 14.5 times 2010 earnings. This puts North American markets among the priciest. At this point we consider 16 times earnings to be a fair upper bound for today’s market. This leaves upside for equities, but less than a few weeks ago. Could multiples expand even more? A higher ratio would require higher earnings growth as justification. TheTue, 27 Oct 2009 09:59:14 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2009-10-27.htmlhttp://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2009-10-02.htmlHighlights The equity rebound is undiminished. Stock markets always rally strongly toward the end of a recession, and this one is no exception. From the troughs of March 9, the S&P 500 is up 54.4% and the S&P/TSX 48.2%. Globally, equities are up 63.0% from trough. Despite the steepness of the ascent, we think it has not been unreasonable. Last year the IMF published a research paper analysing 113 periods of financial stress in 17 countries over the past 30 years. For closer comparisonFri, 02 Oct 2009 11:02:49 GMThttp://www.fxstreet.com/fundamental/market-view/info@nbc.ca (National Bank of Canada)http://www.fxstreet.com/fundamental/market-view/monthly-equity-monitor/2009-10-02.html