To answer that question, let’s go back a few months. At that time, a recession seemed imminent.
Except it didn’t happen. What occurred instead were a couple of major surprises, starting with the amazing rise of artificial intelligence software. Investors didn’t wait around to find out. They bid up the price of seven big stocks that seemed likely to benefit from AI. The rapid rise of the magnificent seven – Alphabet Inc.,
The U.S. home market has also remained surprisingly robust. The SPDR S&P home builders Exchange Traded Fund, which tracks major U.S. home builders and makers of building products, has rocketed 25 per cent higher since January.I think we should be slightly more optimistic about the broad economic outlook. The yield curve is still inverted and a recession may be coming, but it seems increasingly likely to be a shallow, short one.
Look beyond the giddy stock prices of those few companies and the prospects seem somewhat better. Most shares in both the U.S. and Canada are trading at ho-hum multiples of what analysts expect their earnings to be over the next 12 months.