balanced fund quarterly report

March 31, 2019

Economic Commentary

Equity markets rebounded sharply during the first quarter, reversing the significant declines that occurred in the fourth quarter. However, forecasts for economic growth continue to be downgraded on fears of a slowdown in the global economy. Eurozone data releases have been poor to start the year, with sentiment becoming more negative. In Canada, the economy did bounce back nicely following two negative months to end 2018. January GDP surprised on the upside, with a reading of 0.3%, exceeding market expectations. Expectations for future interest rate hikes by both the Bank of Canada and the U.S. Federal Reserve have been tempered as the global economic outlook wanes. Earlier expectations for hikes from both central banks are now off the table with the markets beginning to price in the possibility of a rate cut.

Talks continue between the U.S. and China in an attempt to reach a potential deal, however, no resolution is in place yet. In the U.K., Brexit talks are in disarray as the plans for Britain to leave the European Union have failed for the third time. These developments have begun to negatively impact the British economy.

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