Outlook of the Stock Market In 2018

Outlook of the Stock Market In 2018

Stock market

This article will teach people how to invest and give you information on trends in the Canadian economy and outlook of the stock market in the year 2018.

It is expected the Canadian economy should grow by about 2.2% in 2018 which is slow compared to the 3.1 growth in 2017 but it is still a steady and decent growth on a global standard. Having the industrial and commercial provinces as engines to drive the economy such as British Columbia, Alberta, Ontario, and Saskatchewan. The Atlantic Provinces in Canada will a much slower growth rate of about 1% to the 2.2% forecast.

Interest Rates

For the first time in over 7 years, the Bank of Canada raised the interest rate twice. This is decisive information for Canadian stock markets. Both of the increase presents to country lenders the much-anticipated margin boosts in lending. But the higher interest rate implies that it would be more expensive to borrow money globally which in turn will have a negative impact on businesses in Canada. For business owners, it means it will cost more to borrow money.

NAFTA negotiation stall

The renegotiation of North American Free Trade Agreement (NAFTA)(link NAFTA to nafta website Jojie) by the Canadian and United States Government has called for concerns. With up to 2/3 of Canadian goods and services to be exported to the US, the NAFTA agreement is very important to exporters in Canada. There will be a drastic change in tariffs back to the standards of the World Trade Organization if the NAFTA doesn’t work out. The Agreement will be very helpful because Canada depends on the majority of its trade with the US and the world at large. The Canadian dollar could depreciate by about 5% against the US dollar with will cushion the higher export prices.

Oil Price

The prices of a barrel of crude oil are expected to be within 50 dollars to 65 dollars range and it is expected to stay that way in 2018. There is been a positive impact on the prices of crude oil worldwide due to increase in economic activities. The agreement reached by oil-producing countries with OPEC to reduce oil production has helped drastically to stabilize the oil prices. This will help increase growth in the Atlantic and western part of Canada.

The ever-expanding economy of the world presents an incredible chance for Canadian investors to channel themselves for development and maximize the opportunities for the growth in the Canadian economy. Will the interest rates still fairly low, it is a great time to invest to be competitive and productive.