here has been no shortage of optimism in the financial markets as evidenced by the recent advances in the indexes. Most recently, markets have reacted positively to the prospects of several viable vaccines which will hopefully be available by the New Year.
The economic damage resulting from the response to Covid-19 will not be tallied for some time. The sudden collapse in business activity will bankrupt many companies and industries.
The key is to stay focused on the longer term. As Warren Buffett has stated: "The stock market is a device to transfer money from the impatient to the patient." Conditions willultimately improve. Keep calm and carry on.
Global geopolitical tensions have spiked since the American raid that killed a prominent Iranian general. The unrest in the Middle East just adds to other concerns surrounding global trade disputes, U.S.-China relations, South Asian border disputes, European fragmentation and decelerating economic growth, among others.
Global economic growth has been anemic in the expansion since the Financial Crisis. U.S. real per capita GDP has advanced at a rate of 1.5 per cent during this period, the slowest expansion rate over a decade since the 1950s. The U.S. economy has done better since Donald Trump took office, but the latest estimates are for slower growth going forward.
I write this outlook on the day of the federal election. While the immediate aftermath may cause some investors concern, in the long term it’s fundamentals that drive markets. Hopefully, politicians will take some concrete action to make our country a desirable destination for capital and investment.
Trade issues continue to cloud the economic outlook as the tariffs constrain spending and companies seek alternative supply routes in their attempts to minimize the higher costs resulting from the implemetation of the tariffs. Geopolitical issues are contributing to the growing uncertainty as we face federal elections year in Canada and the US, turmoil in the UK with respect to Brexit and increasing tensions the Asia (Hong Kong) and the Middle East.
MARKET OUTLOOK Global trade conflicts are beginning to impact economic outcomes in very fundamental ways. The disruption is evident in both the bond and equity markets. In the second quarter,…
Global economic growth will continue to deteriorate over the remainder of 2019 as trade conflicts are having an effect on fundamental economic events. Evidence of the impact of the disruption caused by these trade concerns can be seen in the bond market where rates are reflecting higher expectations of a slowdown and in the increasing volatility in the equity markets.