A Promising Economic Outlook Despite Some Risks

IPC Portfolio Services Vice President Blair Setford provides his take on what drove the markets during Q3 2024 and the risks that investors face over the short term in this three-minute video.

In his commentary, Blair notes that the third quarter saw significant economic and market developments influenced by central banks cutting interest rates, shifting concerns from inflation to growth, and ongoing geopolitical issues.

In Canada, the Bank of Canada was the first among the G7 central banks to cut interest rates, with inflation now near the 2.0% target. Three rate cuts have already been made, with more expected. However, economic activity remains sluggish, though a soft landing and moderate growth by 2025 are anticipated.

In the U.S., the Federal Reserve lowered interest rates by 0.5% in September, signalling a policy shift to support a weakening labour market. Historically, U.S. stocks have responded positively to rate cuts, with gains in four out of six previous cycles since 1989. Despite risks, Fed Chair Jerome Powell remains optimistic about the economy, which should support continued market growth.

The U.S. presidential election, with its potential for polarizing outcomes, could also impact markets. Additionally, geopolitical conflicts, especially in the Middle East and Eastern Europe, pose risks to global supply chains, energy affordability, and market stability, though these are considered short-term concerns.

Blair urges investors to remain focused on their long-term strategies despite the uncertainties, as sticking to a well-planned investment approach remains the best way to achieve financial goals.

This video may contain forward-looking information which reflect our or third-party current expectations or forecasts of future events. Forward-looking information is inherently subject to, among other things, risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed herein. These risks, uncertainties and assumptions include, without limitation, general economic, political and market factors, interest and foreign exchange rates, the volatility of equity and capital markets, business competition, technological change, changes in government regulations, changes in tax laws, unexpected judicial or regulatory proceedings and catastrophic events. Please consider these and other factors carefully and not place undue reliance on forward-looking information. The forward-looking information contained herein is current only as of October 2, 2024. There should be no expectation that such information will in all circumstances be updated, supplemented, or revised whether as a result of new information, changing circumstances, future events or otherwise.

The content of this video (including facts, views, opinions, recommendations, descriptions of or references to, products or securities) is not to be used or construed as investment advice, as an offer to sell or the solicitation of an offer to buy, or an endorsement, recommendation or sponsorship of any entity or security cited. Although we endeavour to ensure its accuracy and completeness, we assume no responsibility for any reliance upon it.