|By PR Newswire||
|December 19, 2012 07:16 AM EST||
Bank drops GDP growth forecast three-tenths to 1.7% but sees pick-up in 2014
TORONTO, Dec. 19, 2012 /CNW/ - Without key domestic economic drivers to shelter Canada from a continued weak global economy, GDP growth will slip to a very mediocre 1.7 per cent in 2013, finds CIBC's latest Canadian economic forecast.
"Having earlier tapped fiscal stimulus and a housing boom to shelter the economy from sluggishness abroad, the country's ability to set its own course is now much more limited," says Avery Shenfeld, chief economist at CIBC. "Escaping economic mediocrity will depend on the kindness of strangers, with exports and related capital spending critical to Canada's fate in 2013-14."
Mr. Shenfeld says that the global economy continues to face significant headwinds and as a result he has cut his global outlook for 2013 by two-tenths to three per cent. "It's too early to get the full benefits of policy stimulus in Asia, Europe is too stubborn to soften its fiscal drag enough and amplify ECB bond purchases, and Washington is too wedded to getting going on fiscal tightening stateside, if not the full fiscal cliff."
He adds that while Chinese GDP could show improvement towards an eight per cent pace as early as Q4 of 2012, it is not likely to have much of an impact on other economies as Chinese imports are currently showing no growth at all on a year-over-year basis. As such, he expects there to be a delay before crude oil and other resources rebound in price.
"The absence of a helping hand from abroad will leave Canada exposed," says Mr. Shenfeld. "Blaming temporary disruptions in energy production in Q3 for recent disappointments misses the point: GDP excluding resource extraction has also been decelerating, the loss of home building momentum will offset greater oil output.
"Our downgraded 1.7 per cent growth forecast for 2013 will trail the U.S. pace and is three ticks slower than our last projection. Household debt burdens are keeping consumption bounded by the moderate growth pace for real incomes. Governments also face leaner-than-expected coffers due to downward revisions to nominal GDP expectations, and will be introducing further spending restraints or tax hikes for fiscal 2013."
The report notes that in the near term, this environment will see investors maintain a risk-adverse attitude and see further downward adjustments to corporate earnings expectations. Assets tied to global growth, including commodities and the most cyclical equities, could be flat or see some first half slippage. This will exert near-term downward pressure on the loonie. Equities with less cyclical earnings profiles and well-backed dividends, as well as investment grade corporate bonds, will remain in favour for the next couple of quarters.
Optimism for 2014
"Diamonds are forever, but weak economic growth need not be," adds Mr. Shenfeld. "With its household sector healing, the U.S. should be positioned to lead the way towards a better year come 2014 if, as we expect, new fiscal tightening measures do not hit as deeply that year. Don't underestimate the importance of the upswing underway in housing. As it gathers steam, it will drive related consumer spending ("new living room, new couch") and renovation ("those cabinets have to go"), in addition to actual home-building jobs."
He also expects by 2014 that China will be feeling the full benefit of its own policy easing and the improvement in U.S.-bound exports. Even Europe, if it finally recognizes the need for both a softer hand in fiscal tightening and a more aggressive central bank, might at least register positive growth at that point.
"These developments will propel 2014 exports and resource sector capital spending in Canada, finally delivering the 2½% quarterly growth rates that the Bank of Canada has been expecting, or hoping for, in the past two years," adds Mr. Shenfeld.
"The brighter news on that front, coupled with conservative starting valuations for equities, leaves room for a "risk on" rally in the coming summer and autumn. It's too far out to act on just yet, but by mid-2013, it should be time to shift portfolios into cyclical equities and industrial commodities to take advantage of that likely turn in sentiment."
He believes interest rates will hold steady in Canada through 2013 but that Governor Mark Carney's successor will nudge rates up 50-75 basis points in 2014.
The complete CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/fdec12.pdf.
CIBC's wholesale banking business provides a range of integrated credit and capital markets products, investment banking, and merchant banking to clients in key financial markets in North America and around the world. We provide innovative capital solutions and advisory expertise across a wide range of industries as well as top-ranked research for our corporate, government and institutional clients.
SOURCE CIBC World Markets
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
Sep. 26, 2016 06:30 PM EDT Reads: 2,120
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
Sep. 26, 2016 05:15 PM EDT Reads: 1,582
Vidyo, Inc., has joined the Alliance for Open Media. The Alliance for Open Media is a non-profit organization working to define and develop media technologies that address the need for an open standard for video compression and delivery over the web. As a member of the Alliance, Vidyo will collaborate with industry leaders in pursuit of an open and royalty-free AOMedia Video codec, AV1. Vidyo’s contributions to the organization will bring to bear its long history of expertise in codec technolo...
Sep. 26, 2016 05:15 PM EDT Reads: 2,578
Major trends and emerging technologies – from virtual reality and IoT, to Big Data and algorithms – are helping organizations innovate in the digital era. However, to create real business value, IT must think beyond the ‘what’ of digital transformation to the ‘how’ to harness emerging trends, innovation and disruption. Architecture is the key that underpins and ties all these efforts together. In the digital age, it’s important to invest in architecture, extend the enterprise footprint to the cl...
Sep. 26, 2016 05:15 PM EDT Reads: 263
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
Sep. 26, 2016 05:00 PM EDT Reads: 1,827
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
Sep. 26, 2016 05:00 PM EDT Reads: 2,717
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
Sep. 26, 2016 04:30 PM EDT Reads: 1,616
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Sep. 26, 2016 04:30 PM EDT Reads: 3,353
Digitization is driving a fundamental change in society that is transforming the way businesses work with their customers, their supply chains and their people. Digital transformation leverages DevOps best practices, such as Agile Parallel Development, Continuous Delivery and Agile Operations to capitalize on opportunities and create competitive differentiation in the application economy. However, information security has been notably absent from the DevOps movement. Speed doesn’t have to negat...
Sep. 26, 2016 04:30 PM EDT Reads: 2,100
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
Sep. 26, 2016 04:15 PM EDT Reads: 1,026
Your business relies on your applications and your employees to stay in business. Whether you develop apps or manage business critical apps that help fuel your business, what happens when users experience sluggish performance? You and all technical teams across the organization – application, network, operations, among others, as well as, those outside the organization, like ISPs and third-party providers – are called in to solve the problem.
Sep. 26, 2016 04:00 PM EDT Reads: 2,525
SYS-CON Events announced today that ReadyTalk, a leading provider of online conferencing and webinar services, has been named Vendor Presentation Sponsor at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. ReadyTalk delivers audio and web conferencing services that inspire collaboration and enable the Future of Work for today’s increasingly digital and mobile workforce. By combining intuitive, innovative tec...
Sep. 26, 2016 04:00 PM EDT Reads: 2,839
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
Sep. 26, 2016 03:45 PM EDT Reads: 2,912
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
Sep. 26, 2016 03:30 PM EDT Reads: 1,557
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?
Sep. 26, 2016 03:00 PM EDT Reads: 1,556