. The U.S. Federal Reserve has suggested interest rates may continue to rise and further hikes from the Bank of Canada are on the table, too. Investors face the possibility of a recession and what that will mean for corporate profits already being squeezed by rising costs.
In response, stock markets lost steam and started to backpedal. The S&P/TSX composite hit a closing low for the year at 18,206.28 on Oct. 12 followed by an intraday low of 17,873.18 a day later on Oct. 13. Though it has climbed above the 19,500 mark over the past few months, a December stock boost has failed to materialize this year.
Some tech companies saw growth during the pandemic that supported those valuations, Mahajan said, but the trends started to cool during the reopening phase. Headed into the new year, economic headwinds remain as economists point to the possibility of a recession to start the year. “As we kind of get through the first quarter or two quarters of 2023 we do think that those parts of the market may continue,” she said.