Canadian Job Growth In 2016 Reflected Quantity Over Quality

Maclean’s put of an interesting article covering 75 charts every Canadian should watch in 2017, see here. A nice chart from TD Economics shows that job creation in Canada throughout 2016 reflected quantity over quality. Between January and November part-time job growth significantly outpaced full-time job growth. This type of divergence does not typically occur outside of recessions.

Mid-Size Companies Enthusiastic Since the Election

In a Bloomberg interview this morning Bank of America CEO Brian Moynihan said mid-sized companies in the US are more enthusiastic and have been seeking funds since the election. He said mid-sized companies are “friskier” and “they feel better about the prospects of the regulatory environment and their businesses. They feel better about the possibility of final demand.” This is a significant shift in the confidence of companies that have been hesitant to invest for some time now.

Trump’s Administration Has By Far the Most Business Experience

Ray Dalio, Chief Investment Officer at Bridgewater Associates, published a piece on Monday covering Trump’s newly appointed cabinet and why the new administration will be “hell-bent” on making big economic changes (you can read the full post here). An interesting chart from the post compares the experience of previous incoming administrations. Trump’s administration has by far the most business experience and lower than average government experience (however comparable to the Carter and Regan, see below).

The Bank of Canada Can Be Patient As The Fed Hikes

The Bank of Canada and the Fed’s monetary policy plans have been on a diverging path for some time. The BoC cut rates to cushion the Canadian economy from low oil prices while the Fed has been preparing to hike. Now that we’ve had the second rate hike from the Fed some are wondering how long before the Bank of Canada has to follow.

Breaking Out Of A Tight Range Is Historically Bullish

The following chart from Strategas Research Partners highlights prior trading range breakouts for the S&P500. The last two years saw the S&P500 trade within one of the narrowest ranges on record and historically once the tight trading range is broken it’s bullish for stocks.