Equities continue the rally, but economic paths diverge
Greater scope for Europe and Canada to catch up on growth
Since the pandemic, the U.S. has been exceptionally strong, diverging from the rest of the developed markets in economic growth trajectories as other countries including Canada, have lagged behind. However, the tides may be turning as the U.S. slows and other countries catch up on growth.
Central bank policies diverge
In addition to the increasingly divergent path of regional economies, the inflation trajectories in the U.S., Canada and Euro area are also causing central bank policy responses to be less synchronized.
Strong earnings of mega-cap companies lead to highest market concentration
78% of S&P 500 companies reported Q1 results that exceeded consensus estimates. The S&P 500 reported earnings growth of 6.0%, the highest year-over-year since Q1 of 2022.
