Investors searching for growth opportunities may look to
"The world's economy is again in drive, but operating only on half its cylinders," said one of the report's contributors, Avery Shenfeld, chief economist at CIBC.
This environment makes it challenging to find growth opportunities but
Countries such as
This is holding true whether one looks at equities, fixed income or currencies for "emerging markets and markets that have high exposure to them," notes
Other key findings in this month's report:
All the glitters isn't golden: "We have three reasons to move to underweight on gold," the report states. "1) Weak dollar drove the recent rise of gold, and we believe that the dollar has overshot to the downside, with a relief rally expected in the next two to three quarters, 2) Investor anxieties continue to subside, crimping appetite for financial insurance, including gold, and 3) We see an unwinding of the present exaggerated market fears about near-term inflation."
Credit - what's hot and cold: "Global credit default swap (CDS) markets rallied hard from the widest levels in late 2008-early 2009," the report notes. "CDS sector spreads overall are still three times their tightest levels of
Credit fundamentals come home to roost for Canadian provinces: "Credit fundamentals are reasserting their influence on provincial spreads, the report notes. British Columbia looks notably cheap to Ontario given its underlying credit strengths, while Manitoba's current spread to Ontario is seen evaporating. And Québec continues to offer relative economic outperformance and an expectation of relatively lighter supply.
The report, entitled Global Positioning Strategies (GPS), is a new monthly note from CIBC that responds to investors' increasing interest in a cross-asset investing perspective versus a focus on individual asset classes. The past year's credit crisis has underscored that correlations across markets can play a major role in driving returns on any one asset class, and that a macro perspective is key to anticipating such swings.
The complete report is available at: http://research.cibcwm.com/economic_public/download/gps_oct09.pdf
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