HIGHLIGHTS OF THE WEEK
• This week’s sell-off highlights markets’ acceptance of a worrying new reality: the economic recovery is losing steam..
• The economy is sputtering just as confidence wanes over policymakers’ ability to revive it.
• A double-dip recession still remains the most unlikely scenario. But it will be difficult to build strong economic momentum as long as deep-rooted structural problems persist, particularly in the struggling housing market.
• Despite the U.S. having avoided financial catastrophe by raising its debt ceiling, lingering economic weakness combined with increasing uncertainty in Europe led to the worst declines in financial markets in months.
• Though the Canadian economy continues to show domestic strength by adding jobs at a relatively healthy pace, the overwhelming financial distress does signal weakness amongst its key trading partners.
• This will likely act as a further headwind on the export sector, which was originally expected to be a major driver of growth in the quarters ahead. And with high levels of household debt constraining consumer spending, real output growth will likely suffer going forward.
This information is quite good and it will be for you to keep an eye on what is to happen next.