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Economy

The Good Still Outweighs The Bad

Against the earnings-versus-everything-else market backdrop, stellar earnings are easily outweighing elevated oil prices, rising yields and the increased probability that the Fed may hike rates before the year is out. US allocators should remain invested in equities.

US Investment Strategy by Doug Peta
Stagflation? That Ship Has Sailed

Europe is sliding from stagflation toward recession as prolonged disruptions in the Strait of Hormuz weaken growth, labor markets, and supply chains while keeping inflation elevated. Even if a US-Iran deal is reached, limited fiscal support and rising food inflation leave the Euro Area increasingly vulnerable to a deeper economic downturn.

European Investment Strategy, Global Fixed Income Strategy by Jeremie Peloso
North American Divergence
The US and Canada face increasingly different macro backdrops, and that divergence should support Canadian bonds versus Treasuries. US data has stayed resilient, surprising positively and showing growth momentum. Meanwhile, Canadian data has increasingly…
Daily Insights by Felix Vezina-Poirier
US Resilience Persists
May flash PMIs point to US growth holding up better than the rest of the world. The US composite PMI held steady at 51.7, in line with expectations. Manufacturing rose to 55.3, beating expectations, while services moderated slightly to 50.9. Eurozone PMIs…
Daily Insights by Gabriel Gosselin, Felix Vezina-Poirier
Canada Inflation: Still Looking Through
Canadian April inflation came in cooler than estimates, giving the Bank of Canada some reassurance even as headline CPI accelerated. Headline inflation rose to 2.8% y/y from 2.4%, but came in below the 3.1% consensus. Both of the Bank of Canada’s preferred…
Daily Insights by Felix Vezina-Poirier
No Relief For Canada?
Canada’s data keep disappointing, and stable but still-restrictive financial conditions point to subdued growth ahead. As we recently highlighted, Canadian economic surprises turned negative earlier this year and have kept falling. Canada also faces several…
Daily Insights by Felix Vezina-Poirier
Stagflation Down Under?
The April NAB survey points to a worsening growth-inflation mix in Australia. Business conditions moderated to +3 from +6, a fourth consecutive decline that left the index firmly below its long-term average. Business confidence, the more forward-looking…
Daily Insights by Gabriel Gosselin, Felix Vezina-Poirier
Small Businesses Feel The Squeeze
The April NFIB survey pointed to weaker growth, even as labor-market signals firmed at the margin. The index came in at 95.9, up slightly from 95.8 in March, but expectations deteriorated to 4% from 11%. More importantly, firms’ reported sales and employment…
Daily Insights by Felix Vezina-Poirier
Hot Enough To Hike?

The April CPI report showed clear evidence of the direct effect of higher oil prices on inflation but, so far, limited evidence of passthrough to core.

US Bond Strategy by Ryan Swift
Canada: Losing Momentum
Canada’s growth outlook is deteriorating, with labor-market slack rising and economic surprises turning lower. Canadian economic surprises have turned negative and continue to fall. The April jobs report disappointed, with employment contracting for the third…
Daily Insights by Felix Vezina-Poirier

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