The 47th annual outlook luncheon, held at the Royal York Hotel on January 10 and organized by The National Post, Financial Post, and the Canadian Club of Toronto, focused heavily on the slowing economy, uncertainty around interest rates, and international unrest. The experts on this year’s panel, which included Dennis Mitchell, chief executive officer and chief investment officer of Starlight Capital, Amanda Lang, host of Bell Media’s Taking Stock, Jean-François Perrault, senior vice-president and chief economist at Scotiabank, and National Post columnist Sabrina Maddeaux, were asked to analyze the topics that would likely cause waves in 2024.
For months, economists have been preparing for the potential for a recession in 2024, whether it be technological or not. However, some forecast panelists argued that Canada would completely avoid a recession and that the most pessimistic possibilities were overstated. Panelist Jean-François Perrault stated, “We’re reasonably optimistic that we avoid a recession, in the traditional sense of the word,” noting that although there’s no denying the economy has slowed, households are holding on. That gives some solace in knowing that some of the worst-case scenarios won’t come to pass.
According to Dennis Mitchell, the more upbeat scenario in which a harsh landing is averted is reflected in the stock markets of North America. According to Mitchell, the S&P 500 and the Toronto Stock Exchange are trading at levels that are “certainly not recession multiples,” and they are now factoring in a sizable number of rate cuts. Expectations for earnings growth in the US are likewise between 11 and 12 percent, which is not at all suggestive of a possible recession but does increase the likelihood of a correction should the economic outlook worsen.
Additionally, Amanda Lang observed that stock markets might be overshooting to the upside and seem cut off from the economy. “The underlying assumption is five percent economic growth when the S&P is forecasting profit growth of eleven percent,” the spokesperson clarified. That contrasts sharply with recent estimates of stagnant GDP growth.