News & Events
July 2010 Market Commentary: Global Economy: Growing, but not Accelerating.
July 8th, 2010June was a poor month for equity investors. All major stock markets were down for the month including the TSX, which was down 4.0% for the month but up 8.9% year-over-year. The reason for the downturn in global markets is concern over the direction of the global economy. A series of economic numbers are pointing to a slower growth rate for the second half of 2010 and 2011. Most economists forecasted the economy would rebound strongly from very depressed levels of 2008/2009, which occurred, then gradually slow to a more sustainable growth rate.
Unfortunately, this deceleration has occurred more rapidly than predicted. This slowing has caused investors to question if this is but a precursor to a general contraction in the economy (recession). While we cannot completely dismiss this, it is not our baseline forecast as the “excesses” that typically occur prior to a recession are absent (more later). We continue to feel the economic expansion is still young and admittedly fragile. Policy makers will continue to nurture the economy (keep interest rates low), but barring a shock to the system, our baseline case continues to be that the global economy has seen its lows and an economic expansion continues, albeit at a slower growth rate.
See the complete commentary attached below:
See the complete commentary attached below:
