Solid earnings suggest solid fundamentals

Here's what we're thinking

May 23, 2017

Global markets have generally grinded sideways over the past few weeks as they confronted a myriad of counter-balancing forces including a French presidential election, White House controversies including the firing of the Director of the FBI, oil prices oscillating in a 20% range, escalating tensions with North Korea, Chinese measures to deliver the domestic financial system, etc. Closer to home, Moody’s downgrading of Canada’s banks’ credit ratings capped off a period of general underperformance in Canadian stocks, heightening international focus on elevated household debt levels and over-heated real estate markets. In the U.S., a better-than-expected first quarter earnings season helped to remind investors of solid corporate fundamentals, powering the S&P500 and Nasdaq to new all-time highs.

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