Andrew Pyle, senior investment advisor and senior portfolio manager, CIBC Wood Gundy
Andrew Pyle, senior investment advisor and portfolio manager at CIBC Wood Gundy, discusses his outlook for the markets.With less than six weeks before U.S. President-elect Donald Trump is inaugurated, few appear willing to fight the tape nor fight the U.S. Federal Reserve. Consensus is that the U.S. will not see a recession at least in 2025 as interest rates and taxes decline. Until we see how policies really shake out after Jan.
Even if the new administration delivers on taxes and regulation, but without too heavy of a tariff club and mass deportations, the probability of seeing a third year of gains similar to 2023 and 2024 is low. If U.S. economic demand growth remains strong in response to administration measures, then investors are going to have to prepare for a possible return to higher inflation.
As for Canada, the economy is already showing signs of fatigue and if tariffs by the U.S. were to be implemented, then the risk of an eventual recession here would increase sizably. Which is why we are likely to see Canadian equities underperform the U.S., at least over the near-term, though the faster descent in Canadian rates and the cheaper loonie should act as an offset.
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