JFL

March 31, 2020

Investment Outlook Q1 2020

Economic Review

  • In light of the human and global tragedy that is the COVID-19 pandemic, economic activity has virtually ground to a halt.
  • Central banks, such as the Bank of Canada and the U.S. Federal Reserve, have cut interest rates outside of regularly scheduled meetings in order to provide liquidity.
  • Massive stimulus and bailout packages from governments led markets to finish March with overall losses that were perhaps less than many had expected.

Investment Outlook

  • The overall ramifications that COVID-19 will have on the economy much depends on the effectiveness of policy actions taken to offset the impact of the government response to containing the spread of the virus.
  • For Canada, we need to further discount the outlook for our increased sensitivity to the declining energy sector and higher levels of household indebtedness.
  • As an asset manager and steward of our clients’ capital, we will continue to stress test our holdings and focus on the fundamentals of the businesses we follow.

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