Belmont's Market Update for Q1 2019. For a downloadable PDF version, please click the link below.
Mar312019BelmontMark...
The Economy – Source: RBC GAM
- After strong growth in 2017 and 2018, economic momentum has waned & we expect this trend to continue this year & next.
- The three main risks to our outlook are protectionism, Chinese growth & the US business cycle. Although protectionism is no longer actively deteriorating, the actions taken thus far are starting to inflict economic damage through slowing global trade.
- We have argued for some time that the probability of a US recession is in the realm of 35% for 2019 and 40% for 2020. With
- the recent inversion of the yield curve, formal recession models are starting to agree with that assessment.
- Central banks are no longer actively tightening monetary policy amid a backdrop of slowing growth, less inflation and increased financial market volatility. We don’t expect rate hikes in any major region over the next year as economic growth decelerates and also because we believe the neutral policy rate is toward the lower end of banks’ estimates.
- Although stocks have had a good run so far this year, our models suggest that the rally can persist as long as earnings meet analysts’ expectations.
Companies, highlighted in blue, buying back their own stock (aka. Corporate Buybacks) account for largest equity demand for the last 5 consecutive years.
2019 Federal Budget Highlights -
Individuals:
- Canada Training Credit
- Home Buyers Plan
- Advanced Life Deferred Annuities
- RDSPs & Disability Tax Credit eligibility
- Kinship Care Providers
- Donations of Cultural Property
- Medical Expense Tax Credit & Cannabis
- Ind. Pension Plan & SMEP changes
- Tax credit for Digital Subscriptions
Corporations:
- Business investments in zero emission vehicles
- Small Business Deduction – Farming & Fishing
- Character Conversion Transactions
- Possible Changes to Taxation of Employee Stock Options
- Previously Announced Measures (Nov. 21, 2018):
- Accelerated Investment Incentive
- Write offs of full cost of M&E for Manufacturers
- Business income treatment of communal organisations
For more information click on Article 1. Title link below in Three Articles of Interest.
Three Articles of Interest:
- 2019 Canada Federal Budget - CALU
- What can Pension Consulting do for you? – Belmont Blog
- 3.TFSA or RRSP Contribution? - MoneySense
