5 Takeaways from Sébastien Mc Mahon’s Macro and Market Update at the iA Private Wealth Advisor Summit

We were pleased to be joined at our recent Advisor Summit by Sébastien Mc Mahon, iA Global Asset Management’s Chief Strategist & Senior Economist. Here are five key takeaways from his presentation:

1. We’re entering a new economic cycle. Following the pandemic and then the post-COVID period of high inflation and high interest rates, we’re finally getting back to a “more normal” environment with rates starting to fall.
2. It’s time for diversification. While it’s reasonable to be optimistic for 2025, it’s wise to be diversified across geographies and asset classes.
3. Optimism for Canada in 2025. High interest rates and inflation have Canadian consumers feeling like they don’t get as much for their money. However, the rush to the neutral rate is on and the Bank of Canada should be one of the first central banks to get there. While it may take until the second quarter, 2025 is shaping up to be a very good year for Canada. Over the next three to five years, the Canadian dollar should also benefit from a stronger Canadian economy.
4. China’s economy set to struggle. China is facing important structural problems, especially in its housing market. In China, 70% of a household’s wealth is linked to the value of their house, compared to 45% in Canada and 50% in the U.S. At the same time, the value of Chinese real estate has fallen close to 10% – and the pace accelerating. This has created issues with household wealth, household confidence and the willingness to spend that will make it hard to rebalance China’s economy.
5. All eyes on the U.S. election. Sébastien says a divided government – where one party controls the White House and the other controls one or both houses of Congress – is the best-case scenario for the markets as they generally want the government to stay out of the way.

Be sure to check out Sébastien’s In Your Interest! podcast, where he provides his latest insights and perspective on the markets and economy.