Market

While official sources and the media highlight strong consumer-spending and jobs data in the US, or tout high US stock-market valuations, more than three-quarters of Americans view economic conditions as poor (36%) or fair (41%). This disconnect between performance and perception can have far-reaching consequences; it already helped to propel Donald Trump to victory in last month’s presidential election. So, what is causing it?Here, it is worth considering how market participants deal with asymmetric information – when one party has more or better information than another party or parties. Imagine you were seeking to make a purchase. As a buyer, there is a limit to the information you can glean about your options through direct observation. So, you make your decision based on your beliefs...

“We do have more room to fall,” said Karl Schamotta, chief market strategist at Corpay. The Canadian dollar has been trading below 70 cents U.S. in recent weeks and is nearly four per cent below where it was in September. Schamotta predicts the coming months will be “a very turbulent period for Canada” as uncertainty stemming from incoming U.S. president Donald Trump‘s policy proposals weigh on business investment and consumer confidence — which means a weaker loonie in the short term. Article contentHowever, that’s not the only factor at play. The outperforming U.S. economy, which is pushing U.S. yields higher — well above yields in Canada — is attracting more investments south of the border. There’s also a widening differential in monetary policy between the Bank of Canada a...

US consumer confidence tumbled in December from the previous month amid Americans' growing uncertainty over the economic outlook in the year ahead. The Conference Board's consumer confidence index declined by 8.1 points in December to 104.7, below the 113.2 expected by economists surveyed by Bloomberg. The expectations index, which includes the short-term outlook for income, business, and labor market conditions, sank 12.6 points to 81.1 in December, its largest month-over-month decline since November 2020. That was just slightly higher than the threshold of 80 that usually signals a recession ahead. Stocks hit session lows after the Conference's Board's release and then pared losses. "Consumer views of current labor market conditions continued to improve, consistent with rece...