CANADIAN ENERGY - MIND THE GAP
Equity market volatility surged in October. What was the concern? While the impact of higher interest rates and rising debt servicing costs have been a worry for some time, it was intensifying fears that U.S. tariffs on major trading partners such as Europe and China could stymie or even derail global growth. This fear was evidenced in Q3/18 financial results, with a number of U.S. companies very suddenly providing cautious guidance for reasons including tariffs and trade uncertainty. Fears of a trade war slowing growth in China, the world’s second largest economy and biggest consumer of oil, also sent the price of oil sharply lower last month. Given that tariffs are now likely slowing global growth, how should investors position the energy component of their portfolios?
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