{"id":15856,"date":"2019-07-02T02:47:31","date_gmt":"2019-07-02T06:47:31","guid":{"rendered":"https:\/\/insurance-journal.ca\/article\/russell-investments-remains-neutral-on-outlook-for-canadian-equities\/"},"modified":"2019-07-02T02:47:31","modified_gmt":"2019-07-02T06:47:31","slug":"russell-investments-remains-neutral-on-outlook-for-canadian-equities","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2019\/07\/02\/russell-investments-remains-neutral-on-outlook-for-canadian-equities\/","title":{"rendered":"Russell Investments remains neutral on outlook for Canadian equities"},"content":{"rendered":"\n
<\/div>\n

The Canadian economy may be continuing its gradual recovery, but Russell Investments<\/strong> remains neutral on the outlook for Canadian equities given potential trade tensions and the country\u2019s high household debt level.<\/p>\n

\u201cWith global concerns escalating, valuations not yet compelling, nor sentiment indicators suggesting conditions are oversold, Russell strategists remain neutral on their outlook for domestic equities,\u201d the company said in a recent report.<\/p>\n

Recession fears intensify<\/h5>\n

Recession fears have intensified despite mostly above-industry data compared to global counterparts and are testing the longevity of the current economic expansion heading into 2020, potentially forcing the Bank of Canada<\/strong>\u2019s hand.<\/p>\n

What Russell found impressive is the steady flow of consensus-beating economic data, especially when compared to other developed countries. The relative strength of Canadian data is partly due to the lower expectations in the country\u2019s economy as it sputtered over the last half of 2018. Russell deemed the Canadian labour market as \u201cexceptional\u201d with unemployment near historic lows.<\/p>\n

\u201c[But] while we believe the Canadian economy is gradually recovering, we must keep in mind that Canada is not an island. By the Bank of Canada\u2019s (BOC) own admission, the output gap, which measures actual growth relative to potential, has once again turned negative over the past two quarters,\u201d states the Russell report. \u201cThis means economic slack has emerged again.\u201d<\/p>\n

While the BofC has held pat on its central bank rate, other countries, like Australia, have cut their rates. Russell officials say they don\u2019t believe this divergence between Canada and other developed countries can be sustained indefinitely. The balance of risks \u201cis clearly tilted toward a rate cut as the BOC\u2019s next move. Indeed, the markets as of June 10, 2019 are pricing a 45% probability of a rate cut prior to year-end.\u201d<\/p>\n

Russell said the run-up in Canadian equities over the first quarter was \u201ctoo much too fast\u201d and a pause is in order. Domestic equities have in fact been restrained as U.S.-China trade tensions re-surfaced, stated the report.<\/p>\n

Often cited as vulnerabilities to Canada\u2019s economy are home prices and household indebtedness. Recent economic data has been encouraging, as it still reflects an economy growing at a 1%-1.5% range.<\/p>\n

Read the original article at insurance-journal.ca <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Canadian economy may be continuing its gradual recovery, but Russell Investments remains neutral on the outlook for Canadian equities given potential trade tensions and the country\u2019s high household debt level. \u201cWith global concerns...<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/15856"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=15856"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/15856\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=15856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=15856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=15856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}