Putting your cash to work
With the end of the summer, a seasonal volatility pickup in September/October arrived right on time over the past few weeks. Central banks remain at the epicenter of market trends with accommodative policy set to remain despite a recent spike in bond yields. Continued patience from the Fed and clear signalling that the interest rate hiking cycle will be very shallow should keep the USD range-bound and maintain global market tailwinds.
Other major central banks staying with ultra-loose monetary policy and signs of firming Chinese economic activity are also supporting the global economic recovery. Remaining economic slack, a very low level of interest rates and the shape of the yield curve suggest economic cycle risks remain modest over the coming year. However, geopolitical risks (driving near-term market volatility) looks to remain elevated into year-end as U.S. November elections take centre stage with the first presidential candidate debate set for Monday September 26th a key near-term focus.
We continue to advocate a buyon-dips approach with the most recent pullback offering attractive opportunities to put large cash overweights to work. Stick with a preference for corporate credit in fixed income while in equities we remain bullish on cyclicals as well as international markets.
Call me or email me at richard.dri@scotiawealth.com with any questions you might have around investment strategies or wealth planning.