Global investors need to take a ‘chill pill’ as economic prospects are not as bleak as many fear, says a report from Avery Shenfeld, chief economist at CIBC. Even though he’s been steadily downgrading his Canadian and global growth outlook since the second half of 2014, market chatter has left him feeling like a rosy-glassed optimist. “Prospects aren’t as bleak as some now fear and rates aren’t going negative everywhere. Investors need to be scanning for signs that the news ahead might be better rather than worse and there are indeed some forces that might pave the way for at least less-bad news.” He notes that while emerging market recessions, or in China’s case, growth disappointments, have been front and centre in the global economic slowdown of the past year, there are some positive signs. He does add that the market’s assessment of Canada is rightly one of concern for near-term growth prospects. Just as fiscal policy differentiated the Eurozone’s post-recession fate from that of the U.S., it will hold the cards for getting the Canadian economy back in gear.
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