Around The World in 100 Words - March 2016 - Week 12

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Global stock markets posted modest gains this week, moving ever closer to break-even for 2016. This represents a dramatic recovery from their depths in mid-February, when stock exchanges were down double-digits. Buoyed by better-then-expected economic numbers and improving investor sentiment, markets have responded by erasing most of their declines.

Oil continues to dominate economic news, though this time for strength rather then weakness. West Texas Intermediate (WTI) closed over $40 a barrel -a 30% gain from its February lows. Though welcome news for investors, we remain cautious in the near-term outlook for oil, where supply continues to outstrip demand and inventories remain high.

Interest rates remain accommodative, with only the US Central Bank committed to further rate hikes in the 2nd half of the year. Here in Canada, economic growth remains flat, all but ruling out a rate hike in 2016.

As the fiscal quarter (Q1) comes to a close, the mixed signals that dominated the last 3 months have investors stretching their heads as to what lies in store for Q2 and beyond. Our view is that it is a waitand-see, and we believe that markets will remain more volatile then in previous years, as the market tries to determine what the appropriate price is for global equity prices. Bonds continue to hold up well, moderating market volatility while protecting investors capital. We anticipate our diversified portfolios will hold up well in Q2, giving investors a balanced return on a risk-adjusted basis.