Around The World In 100 Words: APRIL 2016; Week 14

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Last week, major world indexes were wavering. The six week rally in equities had been slowing, but it was unclear as to whether markets were about to take a breather or move strongly in one way or another. With the Purchasing Managers Index (factory orders) numbers coming in below expectations, markets have spoken, unfortunately with a negative tone. Stock markets fell sharply, with most indexes off 1-2% for the week, and crude oil drifting down back towards $35.

The US trade deficit widened more than expected, as a rebound in exports was offset by an increase in imports. This suggests stronger core economic growth in the worlds’ largest economy –a net positive for the global economy as a whole. Canadian exports were better in Q1, with much of the improvement explained by higher exports to the US.

So, with Q1 behind us, where are we now and where are we going? Forecasting it is said, is a particularly hard thing to do –especially about the future. But our view is that markets will continue to see higher volatility then recent norms, as investors try to determine the correct valuations for stocks in a see-sawing global economy. That’s the now. As to where we are going, our view is that the global economy will continue to strengthen, but with starts and stops. We remain cautiously optimistic, and believe our conservative, defensively positioned portfolios are well positioned to deliver sold, risk-adjusted returns over time.