TORONTO, Dec. 5, 2012 /CNW/ - Scotiabank's leading market commentators
today outlined their outlook on global developments that will drive the
economy and capital markets in 2013 and 2014.
"While Canada may lag U.S. growth as job creation and household spending
moderate, in many ways our economic fundamentals remain more favourable
here," said Warren Jestin, Senior Vice President and Chief Economist,
Scotiabank. "Unlike the U.S. and Europe, Canada has regained the jobs
lost during the financial crisis and its real estate markets are in
much better shape."
Addressing Bank clients and the media at Scotiabank's 2013-2014 Economic
and Market Outlook Conference, Mr. Jestin said global economic and
political uncertainty now fueling financial market volatility is likely
to linger well beyond 2012. He said the European fiscal crisis will
remain in the headlines, with public sector retrenchment and private
deleveraging keeping a number of debt-heavy nations in recession
through much of 2013.
"However Canada's relatively better fiscal position provides a strategic
advantage important for longer-term growth and prosperity," added Mr.
Jestin. "A world-class financial system also supports growth at a time
when banking crises in many countries have impeded economic
The outlook for the Canadian dollar in 2013 and 2014 is also strong,
said Camilla Sutton, Chief FX Strategist. She expects it to close both
years above parity and with an appreciating trend.
"The single most important factor driving our view is relative monetary
policy," added Ms. Sutton. "Entering 2013, the U.S. Federal Reserve is
expected to expand its quantitative easing program again. This balance
sheet expansion juxtaposed against the Bank of Canada's
neutral-to-hawkish stance is likely to prove a significant support for
the Canadian dollar."
Vincent Delisle, Investment Strategist, Portfolio Strategy Group,
forecasts a modest upside to corporate profits and expects equity gains
to be supported by price-to-earnings ratio (P/E) expansion, as
risk-appetite slowly recovers..
"Our game plan for 2013 is to be positioned for pro-growth conditions -
equities over bonds, cyclicals over defensives - in the first half,"
said Mr. Delisle. "The Toronto Stock Exchange (TSX) could modestly
outperform the Standard and Poor (S&P) 500 initially in 2013, but
diverging housing trends and tepid commodity gains are likely to keep
the Standard and Poor 500 ahead of the MSCI World AC (All Country)
index again in 2013."
Scotiabank provides clients with in-depth research into the factors
shaping the outlook for Canada and the global economy, including
macroeconomic developments, currency and capital market trends,
commodity and industry performance, as well as monetary, fiscal and
public policy issues.
Scotiabank is one of North America's premier financial institutions and
Canada's most international bank. With more than 81,000 employees,
Scotiabank and its affiliates serve some 19 million customers in more
than 55 countries around the world. Scotiabank offers a broad range of
products and services including personal, commercial, corporate and
investment banking. With assets of $670 billion (as at July 31, 2012),
Scotiabank trades on the Toronto (BNS) and New York Exchanges (BNS).
For more information please visit www.scotiabank.com.
SOURCE: Scotiabank - Economic Reports
For further information:
Devinder Lamsar, Scotiabank Media Communications, (416) 933-1171, firstname.lastname@example.org.