Actionable Investment Opportunities
We highlight actionable investment opportunities across various asset classes, including short-term US and Canadian government debt, high-yield bonds, private credit strategies, preferred and structured equity, venture debt, and new allocations to private equity. Short-term US and Canadian governmen
Alternatives & Private Investments
Hedge funds had modest gains in Q2, with real estate showing mixed results and the office sector facing increasing defaults. Private equity performed well in 2022 and likely continued positively in 2023, while venture capital saw a decline but valuations stabilized, and down-rounds increased due to
Fixed Income Markets
Safe fixed income declined modestly in Q2 as interest rates increased. High yield bonds and leveraged loans appreciated YTD, but credit stress signs are emerging with increasing default rates.
Equity Markets
Equity markets rallied strongly with US stocks outperforming international markets. The broadening of the rally was driven by positive economic data and declining inflation, but uncertainty remains regarding H2 2023 and 2024 earnings due to several risk factors.
Shorter-term View
Multiple potential paths for equity returns are projected over the next 6-12 months, with an optimistic case envisioning a rise in S&P 500 index to 4,800-5,100 due to moderating inflation and possible rate cuts.
Macroeconomic Conditions
The US economy is holding up well with strong consumer spending but weak manufacturing data. A mild recession is predicted for 2024, while Canada's growth may slow due to rising household debt costs, and Europe's growth has stagnated with negative GDP growth in some quarters
Inflation and Labor Markets
Inflation has peaked in major regions, but the pace of core inflation's decline remains uncertain. Labor markets in the US and Canada are healthy but showing signs of loosening, with job additions slowing down and unfilled vacancies decreasing.
Strategic Asset Allocation View (7-years)
The seven-year forecast predicts declining interest rates but at higher levels compared to the past decade. Labor shortages and geopolitical uncertainties are present, while equity returns are predicted to be mid-to-high single digits with growth stocks outperforming value stocks, albeit at a slower
Capital Markets Executive Summary
Global equity markets (ACWI Index) rose by 6.2% in Q2 and gained 16.7% YTD through July 14, 2023, with US stocks leading the rally due to optimism in tech companies, decreased inflation, positive economic data, and the resolution of the regional banking crisis. International equities had a less impr
