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Economic Viewpoint

Volatility May Remain High, but the Stock Markets Could Bounce Back

November 29, 2018
François Dupuis, Vice-President and Chief Economist • Mathieu D’Anjou, Deputy Chief Economist • Benoit P. Durocher, Senior Economist

The bull market that began after the 2008 financial crisis is nearly ten years old in the United States. However, recent months have been difficult for investors. While the U.S. stock market may appear to be expensive according to some indicators, those based on earnings and interest rates seem to indicate that it is still attractive. The Canadian stock market, meanwhile, looks like a bargain where things currently stand. Since the economic environment should remain favourable for a while yet, the indexes still have some potential for gains. The episodes of volatility, such as those seen in February and since early October, could end up being frequent, however, as investors will continue to try to anticipate the next recession.