Market Watch- Nov. 23, 2018

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Markets Continue to Show Signs of Volatility

Cleaning roadways

City of Red Deer to begin street sweeping on Sunday

11h ago

mixed bag

Unemployment rate both up and down for Red Deer in March 2026

12h ago

March 2026 Incident

Trial date set for Red Deer man charged in downtown assaults

12h ago

It was a shortened trading week in the U.S. as markets there were closed Thursday for Thanksgiving. For the four days covered in this report, the Dow dropped 948 points to close at 24,465, the S&P 500 shed 86 points to settle at 2,650, while the tech-heavy Nasdaq surrendered 276 points to close at 6,972. In Canada, the TSX was down 64 points to end at 15,092.

Equities/Strategy

Strategy

We continue to recommend modest overweight exposure to equities and underweight exposure to fixed income, relative to our long-term strategic asset allocation model. Despite recent financial market volatility, we maintain our constructive outlook given the currently low risk of a U.S. recession and healthy corporate earnings growth. That said, our expectation is for more frequent bouts of financial market volatility in the near and medium-term owing to the maturity of the current business cycle and a long list of risks including a split U.S. Congress, monetary policy tightening by the world’s major central banks, European politics and global trade tensions. We continue to recommend managing these risks through diversification across asset classes and geographies. Further, we recommend exposure to alternative assets, which typically exhibit low correlation to traditional asset classes (such as bonds and equities) and can help investors reduce portfolio volatility and enhance potential risk-adjusted returns. We maintain our bias toward thematic investments in issuers with sustainable competitive advantages, high free cash flow and low leverage.

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