Canada’s economy started 2024 strongly but softened slightly as the year progressed, with goods and services both slowing along with some offsetting improvement in mining and petroleum output.
Positive U.S. stock performance was driven by better-than-expected earnings growth and economic optimism tied to Republican success in the November elections.
While European economic growth continues to be anemic, financial markets in Europe and elsewhere are gaining due largely to improving U.S. growth and expectations that inflation is on the wane.
Looking to 2025, the macroeconomic environment has become more challenging for Asian equities after the U.S. elections.
More recently, we have started to see investors move assets back into China, which has been the best performing country since the central government announced an economic-stimulus package at the end of September.
Executive summary
The intense economic headwind from high interest rates is fading and relief is on the way as reduced inflation pressures have paved the way for central banks to loosen monetary conditions.
Executive summary
The intense economic headwind from high interest rates is fading and relief is on the way as reduced inflation pressures have paved the way for central banks to loosen monetary conditions.
Economy
The global economy continues to decelerate and, while a mild recession is possible given deterioration in labour markets, we think the most likely scenario is that economies continue to expand over our forecast horizon.
Fixed Income
In the context of our forecast for modest economic growth and cooling inflation, it is reasonable to expect steady global monetary easing over the remainder of 2024 and into 2025.
Equity markets
Mega-cap technology stocks have greatly benefited from optimism regarding the productivity improvements that artificial intelligence could bring, but the enthusiasm for these stocks may be getting tested.