Scotia McLeod™

After a rocky start, North American stock markets performed better than expected in 2009, and the Canadian economy is recovering faster than economists had predicted.

The stock market rally began in March and by the end of September — exactly one year after Lehman Brothers announced bankruptcy and triggered what some called the worst financial crisis since the Great Depression — the S&P/TSX and S&P 500 indices had almost returned to what their values had been 12 months earlier.

By mid-summer 2009, economic indicators in Canada showed rising consumer and business confidence and a revived housing sector. Unemployment bottomed at 8.7% in July and, from that point, jobs began to increase. But in the U.S., recovery was slower and more tentative as job losses were deeper, with unemployment hitting a 26-year high of 9.8% in September.

In July, the Bank of Canada announced that the recession in our country was over, upgrading its forecast for the third quarter to 1.3% growth from a 1% decline, and projecting GDP growth of 3% in 2010 and 3.5% in 2011. The International Monetary Fund predicted that Canada would lead the developed world in the global economic recovery.

While global economies gain strength, challenges still remain. Will economies function once government stimulus is removed? Will consumer spending bounce back as the employment picture brightens? Will Canada’s manufacturing sector be able to recover while a strong dollar dampens exports?

As the investment landscape evolves in 2010, we can help you position your portfolio to take advantage of new opportunities arising from the recovery.

This entry was posted on Wednesday, January 13th, 2010 at 12:16 pm and is filed under New Items.