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2017 Capital Market Outlook

  • We expect modest improvement in global GDP growth.
  • We see US economic growth leading with marginal improvement from Europe, Canada, and Emerging Markets.
  • We expect 2017 will see the MSCI World, S&P 500 and S&P/TSX Composite Indices string together back-to-back positive years.
  • For 2017, we expect Canadian equities to realize total returns in the neighborhood of 10%, while we expect US equities to finish the year within a percent or two of a 7% total return. The divergence between sector results is likely to be large, providing greater opportunity for active managers versus a passive management approach.
  • We hold a positive outlook for equities in Europe and the Emerging Markets, but a negative outlook for Japanese equities.
  • Fixed Income will struggle to manage a positive return in 2017. We expect the total return to be flat, but if the yield curve were to shift up by much more than a half percent, we expect to see returns from the FTSE/TMX Canadian Bond Universe turning negative.
  • High quality fixed income securities have the ability to offset bouts of equity market weakness regardless of the underlying trend or the absolute levels of yields.
  • Our forecast for the Canadian dollar is to trade in the low 70¢ range in 2017.
  • We expect oil to reach an average WTI price of US$53/bbl over the course of 2017, beginning below that level and ending the year above.

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Insurance products, including segregated fund policies are offered through Cowie and Associates Financial Services Inc., and Wayne Hargrave, Scott Cowie and Elaine Hargrave offer mutual funds through Quadrus Investment Services Ltd.

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