CIBC Asset Management Perspectives As Good as It Gets?
After a stellar year for the world economy in 2017, the main question is not whether the growth outlook is good or lacklustre. The real question is: how long can this last? How long can the equity bull market continue before it hits a bump in the road?
- Fixed Income vs. Equity: For the moment, equities still look more attractive than bonds. It will take a more significant rise in yields to tip the balance in favour of fixed income.
- Equity: Despite a run of very strong performance in emerging market equities, this geographic sector remains the most attractive due to its stabilizing fundamentals.
- Fixed Income: Global bond yields will likely edge higher over the next year. Increasing inflationary pressure could come from shrinking output gaps in the U.S. and Canada, especially since higher energy prices are already driving headline inflation higher.
- Currencies: Several factors will restrain the upside for the Canadian dollar limited upside for oil prices, particularly Canadian oil prices, and NAFTA negotiations that will spill over well into 2018.
Perspectives Video Commentary with Luc de la Durantaye
Podcast with Luc de la Durantaye: Get Ready for More Volatility