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Investors should brace themselves for explosive economic growth in the coming quarters as trade with the United States rebounds, Merrill Lynch said Tuesday.
Economist Sheryl King said the latest Bank of Canada report suggests the economy could bounce back with several quarters of 10 per cent growth in the next year. Her report is titled: "Are markets ready for 10 per cent GDP?" The answer to her question is a solid "no."
"Fixed income and equity markets alike are overly focused on yesterday`s news," she said. "But we`ve seen a huge surge in business sentiment, which is a much more timely piece of information even though it is anecdotal."
She said the Bank`s Business Outlook survey turned sharply in the second quarter, with a reading of 39 compared to -22 in the first quarter and "an epic" -34 in the fourth quarter.
"The markets are far too fixated on the slow, halting, return to growth scenario, in our opinion – especially since recoveries virtually never have that nice linear trajectory," she said.
Read the full article here.
Economist Sheryl King said the latest Bank of Canada report suggests the economy could bounce back with several quarters of 10 per cent growth in the next year. Her report is titled: "Are markets ready for 10 per cent GDP?" The answer to her question is a solid "no."
"Fixed income and equity markets alike are overly focused on yesterday`s news," she said. "But we`ve seen a huge surge in business sentiment, which is a much more timely piece of information even though it is anecdotal."
She said the Bank`s Business Outlook survey turned sharply in the second quarter, with a reading of 39 compared to -22 in the first quarter and "an epic" -34 in the fourth quarter.
"The markets are far too fixated on the slow, halting, return to growth scenario, in our opinion – especially since recoveries virtually never have that nice linear trajectory," she said.
Read the full article here.