Economic data remains rosy; Summer volatility possibly ahead

Here's what we're thinking

June 6, 2017

As global markets close the door on the month of May we find equities handily beat bonds (U.S.: +1.5% vs +0.3%; Europe: +4.5% vs +1.7%) despite a spike in volatility on the back of political noise out of Washington. However, in Canada, risk aversion dominated, leaving stocks (-1.3%) lagging bonds (+0.7%) on the back of growing global investor concern over recent headlines highlighting domestic housing/debt/financial sector pressures. While Canada’s underperformance relative to other global markets should unwind itself in coming weeks/months, a pending kick-off of talks to renegotiate NAFTA could maintain bouts of volatility for some time yet. On the economic front, indicators suggest the pace of activity globally has remained solid through the first five months of 2017, benefitting from a rebound in business investment and healthy employment growth.

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