The Canadian equity market will continue building on its strength from 2024 despite lingering political uncertainties, experts forecast. But investors should prepare for more volatility and be patient as the pace of gains is expected to be a bit slower. There's a strong mandate for the current bull market to continue in the new year despite tariff threats from the U.S. and political uncertainties in Canada, said Angelo Kourkafas, senior investment strategist at Edward Jones.
'When we take a step back and look at the foundation ... it is ongoing economic growth,' Kourkafas said. 'It is rising corporate profits and the outlook for lower interest rates at a gradual pace and all these things will remain in place for 2025.'Kourkafas predicts the uptick will continue for another year 'but likely, we are going to see volatility increase and the pace of gains slow.'Kourkafas said the ongoing tariff threats from Donald Trump could hurt business investments. The over-valuation of certain tech stocks in the U.S. market also poses a threat to markets, Kourkafas said. 'There's a lot of enthusiasm around artificial intelligence but valuations are a bit stretched,' he said. Despite that, many analysts believe the TSX has a solid foundation underpinning its consistent growth. Rising corporate profits and earnings across the board as well as lower interest rates from the Bank of Canada will 'help drive the equity market toward a new record,' said Brianne Gardner, senior wealth manager of Velocity Investment Partners at Raymond James Ltd. The TSX is projected to have growth supported by strong commodity prices, especially in the energy and materials sectors, which are set to rebound in 2025, she said.The federal government recently increased its investments in Canadian infrastructure in an effort to increase the number of homes in the coming years, which could help to revive the materials sector on the inde
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