News

July 2010 Outlook

June 12, 2010. Escape velocity is an astrophysics term that describes the speed needed to break free from a gravitational field. From a financial perspective the concept of escape velocity could also be used to describe the developed world’s struggle to break free from the crushing influence of exorbitant debt loads into an environment of sustainable economic growth. While the current poster child for this problem is Greece, the real problem rests with the largest economy in the world, the US.

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June 2010 Outlook

June 21, 2010. It’s déjà vu all over again. Fears over a European sovereign debt default and a contagion spreading from that region to the rest of the world has produced a flight to safety as investors abandoned global equities in April and May in favour of German Bunds and US Treasuries. Investors experienced an unpleasant flashback to the days when Lehman Brothers went under and the ensuing credit crisis precipitated a meltdown in equity markets and a near collapse in the global economy. But it is only that – a flashback.

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May 2010 Outlook

May 19, 2010. In this month’s Outlook we take a step back from the current business cycle to examine some of the longer term secular influences that we believe will shape the global economy and financial markets over the next decade. Our recent Investment Insights sessions explored “What History Tells Us” as we believe that one can draw important lessons from the past so as to juxtapose today’s environment against the historical record. Establishing a longer-term secular backdrop will be paramount for making investment decisions in the context of the business cycle.

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Benefits Canada Top 40 Money Managers Report [pdf]

The Benefits Canada May 2010 Top 40 Money Managers Report is now available. Click on the link above to view the pdf.

April 2010 Outlook

April 15, 2010. It is starting to look like a “V”. The North American economy continues to gain traction with the vast majority of incoming data surprisingly strong, especially when compared to the consensus view for a moribund recovery. Conditions have improved to such an extent that many aspects of the financial system are almost back to normal.

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March 2010 Outlook

March 18, 2010. March is a month of anniversaries. We have just passed the one year anniversary marking the bottom in North American equity markets. Since March 9, 2009, markets have rapidly clawed back over 60% of their previous bear market losses. March also marks the tenth anniversary of the NASDAQ market peak. The bursting of the technology bubble in 2000 sent this index into a tailspin which troughed with the market down by over 80%. On a cheerier note, on March 15 CC&L celebrated its 28th anniversary.

In this edition of Outlook we consider where we are today in terms of the economic recovery and look ahead to where we believe markets are headed.

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February 2010 Outlook

February 18, 2010. In this issue of Outlook, we focus on developments at CC&L over the past year highlighting areas that are important to ensuring that we can continue to deliver high quality investment management services to our clients.

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Forecast 2010

January 28, 2010. Despair has turned to hope. Economic activity is starting to lift and credit markets are healing. But, the outlook for global growth and financial markets remains very tenuous.

Investors, while still shaken and a little leery about the past two years' events, are nevertheless grateful for the past year which turned out better than most dreamed possible.

Last year’s uncertainty over the impact that the policy responses would have on the economic crisis has given way to a dilemma where investors are asking “when, at what speed and how effectively can those same policy responses be unwound and can the private sector stand on its own?”

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January 2010 Outlook

It is our custom at the start of each new year to review the prior year’s Financial Markets Forecast and the results of our investment strategy, while keeping in mind that the forecast is a point-in-time view and subject to change as events unfold throughout the year.

The dilemma that investors faced was whether or not the raft of policy responses would arrest the destructive power of the systemic de-leveraging that was unfolding and what would be the implications for financial markets.

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December 2009 Outlook

December 17, 2009. Is a Santa Claus stock market rally on the way? It is nearly impossible to predict short-term moves in the market but we can say with certainty that investors will not find a lump of coal in their Christmas stocking this year.

When we examine the forces at work in the final weeks of 2009, we are torn between two scenarios: will the recapture of some lost wealth lead to profit-taking or will the growing sense of well-being reinforce the seasonal market gains we often see at this time of year.

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November 2009 Outlook

November 16, 2009. Confusion is rising as the consensus view wobbles.The general consensus among investors and economists has been that we will experience a sub-par economic recovery and below trend growth in the years ahead. This view is based on the notion that serious global imbalances have developed over the past 15 years that are now in the process of being unwound, particularly private sector balance sheets in the United States.

We share this view, which has led us and others to the conclusion that the typical post World War II “V” shaped recovery is not in the offing. However, there has been an increasing amount of confusion around recent improvements in economic data which has been the result of very generous fiscal and monetary programs. Bottom line - we are still calling for sub-par economic growth with more risks to the downside than the upside.

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October 2009 Outlook

October 16, 2009. Recent economic releases and corporate earnings reports have come in higher than consensus forecasts, propelling equity markets to new cycle highs while leaving fixed income markets firmly entrenched in a narrow trading range.

The economies of both developed and developing nations are strengthening which lends weight to the argument that the coming recovery will be fairly typical (“V” shaped) rather than our forecast for something more low key.

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September 2009 Outlook

September 1, 2009. #%π≠αˆ*ζV√W! — A series of random symbols is often used as a polite way of expressing an expletive, and over the past year there have been plenty of occasions when a few choice words would have been warranted. But now it is probably fair to say that with financial markets and the global economy healing there is less call for profanity.

However, there is still a place for some symbolism, especially when it comes to describing the potential path of the emerging economic recovery. Economic forecasters are debating the health of the recovery and the likely shape it will take on, with most settling on a “V, W or Modified Square Root” to describe the path of the recovery.

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August 2009 Outlook

August 14, 2009. A “golden cross” has been formed! When the 50-day moving average of a stock price or market index crosses through its 200-day moving average, a new trend is established. This technical indicator is called the golden cross because it has an excellent record of predicting market trends. Last month, its reading for the US equity market turned clearly bullish.

However, this is just one indicator, and some of the shorter-term technical models are signalling that markets are extended and due for a retracement. Also, while technical indicators give us some insight into the internal workings of the marketplace, it is the underlying fundamentals of the economy and the financial system that are critical to the outlook for future asset prices.

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July 2009 Outlook

July 16, 2009. Baseball’s seventh inning stretch is that point in the game when you know the end is in sight but a short break in the action provides a welcome opportunity for everyone to take a deep breath before the action begins again. Investors have been taking their own break from the action by backing away from financial markets so as to contemplate the end of the “Great Recession”. The break has led to equity market weakness, a small lift in interest rates and a slight widening in credit spreads.

The question this poses is whether or not this is a new trend from the recent dramatic recovery in the prices of risky assets or is it just a short pause and small retrenchment along the road to a full recovery?

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June 2009 Outlook

June 18, 2009. Capitalism and the concept of free markets is a failed strategy, or so the thinking goes in many circles today. There is a developing groundswell of opinion that the free market system is broken and that capitalism promotes corruption and greed. Undoubtedly Wall Street’s behavior has been reckless and the financial system is in need of major repairs.

However, this is not the entire story. The collapse of the housing bubble, the financial crisis that ensued and subsequent stock and credit market meltdowns were not a function of the failure of American capitalism per se, but rather were the unintended consequences of some avoidable human errors.

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CC&L Pandemic Response Update

April 30, 2009. In light of the World Health Organization (WHO) raising of the pandemic alert level to 5, a communication was sent to our clients and associates outlining the steps that have been taken to ensure the continued effective operation of our business while at the same time ensuring the safety of employees.

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