With over 20 years of experience in financial markets, Martin Lefebvre oversees tactical asset allocation and investment solutions at National Bank Investments. He has held senior roles at Private Banking 1859, Natcan Investment Management, and Desjardins Group. Holding a Master’s in Economics from UQAM, Martin brings deep expertise on the economic and political landscape in Canada and the U.S. In outlook 2025 he provided updates on the financial markets, provided insights into the current economic landscape, political influences, and market trends. Below are the key takeaways from the discussion:
Economic Landscape & Market Conditions
- The current economic backdrop remains strong, with positive indicators such as:
- Manufacturing activity rebounding
- Low unemployment rates
- Strong job creation and wage growth
- Inflation trending toward central bank targets
- The feared recession of 2023 did not materialize, and there are signs of a potential soft landing for the economy.
- Interest rate cuts remain a possibility, providing further support for markets.
Political Uncertainty & Tariffs
- Ongoing political developments, particularly in the U.S., are causing market volatility.
- The potential for new tariffs, particularly a proposed 25% tariff, has created uncertainty but has been temporarily postponed.
- Currency markets reacted to the tariff announcement, with the U.S. dollar experiencing fluctuations before stabilizing.
AI, Cloud Computing, and Market Trends
- Artificial intelligence (AI) and cloud computing have been major drivers of market growth.
- The rapid adoption of AI, particularly through large language models, has reshaped investment opportunities.
- Competition in AI development, including international players, has led to market volatility, notably affecting major tech stocks.
- Despite short-term volatility, AI is expected to have a long-term impact similar to the rise of computers in the 1980s and the internet in the 1990s.
Inflation, Interest Rates, and the Dollar
- Inflation initially spiked post-COVID due to supply chain issues but has since moderated.
- Factors such as rising oil prices and wage increases contribute to inflationary pressures.
- Interest rate policy remains key in managing inflation, with potential for future adjustments depending on economic conditions.
- The strength of the U.S. dollar continues to be a major factor influencing global markets.
Conclusion
- The current economic environment remains strong, but uncertainty persists due to political developments and policy shifts.
- AI and cloud computing are expected to continue shaping markets, though volatility is likely in the short term.
- Investors should stay informed and adaptable as economic conditions evolve.
By focusing on these trends, investors can better navigate the complexities of the market while keeping an eye on both risks and opportunities.