Not exact matches
So it will bring less growth —
still positive growth, but just less, more
moderate growth, and probably somewhat higher
inflation.
This turmoil has confirmed what our central banker, Mark Carney, said in his statement last week: that the economy is growing, in both Canada and globally, but the recovery is
still fragile, especially in the US and the Euro - periphery, and that while food and gas prices have pushed up
inflation, it should
moderate from here.
The price increase was also driven by the reality that seafood
inflation, although
moderated from where it was at the beginning of the year, was
still elevated.
I continue to expect that we will gradually increase our exposure to
inflation - protected securities and commodities on substantial weakness in these areas, but as
inflation pressures are most likely
still several years away, our primary concern here is with fresh credit weakness, and that concern
still translates into a
moderate exposure to interest rate fluctuations.
As usual, I don't place too much emphasis on this sort of forecast, but to the extent that I make any comments at all about the outlook for 2006, the bottom line is this: 1) we can't rule out modest potential for stock appreciation, which would require the maintenance or expansion of already high price / peak earnings multiples; 2) we also should recognize an uncomfortably large potential for market losses, particularly given that the current bull market has now outlived the median and average bull, yet at higher valuations than most bulls have achieved, a flat yield curve with rising interest rate pressures, an extended period of internal divergence as measured by breadth and other market action, and complacency at best and excessive bullishness at worst, as measured by various sentiment indicators; 3) there is a
moderate but
still not compelling risk of an oncoming recession, which would become more of a factor if we observe a substantial widening of credit spreads and weakness in the ISM Purchasing Managers Index in the months ahead, and; 4) there remains substantial potential for U.S. dollar weakness coupled with «unexpectedly» persistent
inflation pressures, particularly if we do observe economic weakness.
Cement and concrete costs are advancing a more
moderate four per cent year - over-year, but this is
still roughly double the rate of
inflation.