the rennie landscape - Q3 2019


THE RISE OF THE STOCK MARKET: A DECADE OF GROWTH Arguably, the most ubiquitous (but perhaps also the most dubious) indicator of economic

the NASDAQ, which has seen a more-than- tripling in its total market capitalization (301% growth). In hindsight, going all-in on the NASDAQ in August 2009 versus doing the same on the TSX or FTSE would have been unambiguously preferable, but really, who wouldn’t take a 50% return over ten years? This is all to say that during the post- recession recovery stock markets, reflecting among other things the strength of corporate earnings, have performed very well. But with 2018 being the worst-performing year for stocks in a decade—due to signs of a global economic slowdown, political dysfunction, and inflation fears, among other factors— the question is begged as to whether 2019’s stock market rebound is sustainable. We will be watching this, along with the ongoing US- China trade dispute, tensions in the Strait of Hormuz, and evolving monetary policy over the coming months for what it means to our economy and housing market.

well-being is the stock market. Each day, we read or hear about its ups and downs, reflecting moment-to-moment developments such as disappointing corporate earnings reports, geo-political clashes in the Middle East, or the frenetic social media musings from people in power. In any event, while stock market movements can simultaneously mean one thing or another depending on the lens through which they are viewed, they are on the whole indicative of both the current health of global economies and the risks they face going forward. What we know is that in the ten years since the Great Recession, global stock markets have performed well. At the low end are the FTSE and TSX, which returned 52% and 50%, respectively, over the past 10 years. At the other end of the spectrum is


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