Monthly Market Insights: February 2017

Financial graphs on a computer
Every month, Cambrian shares the Monthly Economic Commentary provided by our partners at Credential Financial Inc.. If you're looking for advice or have questions about the Monthly Economic Commentary, advisors are here to answer your questions.

Key Takeaways:

Economy is improving.
The prospects of Canada’s economy are looking brighter as indicated by recent economic data. The manufacturing sector, weighed down by muted growth, continues to move deeper into expansionary territory with PMI readings much improved over previous months. With increased activity, workers benefited as January unemployment numbers surpassed expectations, adding over 48,000 jobs where a loss of 10,000 was forecasted, and dropping the jobless rate to 6.8%. From a trade perspective, the low Canadian dollar and rising price of crude - one of Canada’s main exports - helped the economy register a second straight surplus, which was last accomplished in September 2014. But despite the good news, optimists remain cautious. The makeup of the labour market is tilted more towards part-time positions, instead of the preferred, more stable full-time hirings. A fall in the price of oil can also easily wipe out a surplus because of the commodity’s high correlation to our economy.

Trade has been a key topic of U.S. president Donald Trump as he turned his attention to Canada. The first face-to-face meeting between Prime Minister Trudeau and President Trump had Canadian markets and CEOs worried that a renegotiation of NAFTA would be a setback to Canada’s manufacturing sector. Investors were able to breathe easier following the meeting between the two leaders as they both publically acknowledged the importance of the Canada-U.S. economic relationship. In addition, Trump indicated that his changes to NAFTA would be "tweakings" that would be mutually beneficial for both countries. Back home, manufacturing got another boost as sales data surprised, signalling perhaps recovery in a sector that has struggled for growth.

Read the full February Market Insights