Getting over the Bear

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Getting over the bear

The North American economy is looking better

Nobody ever said being an investor was easy. For the last three years, markets have

been entrenched in bear territory. In 2002 alone, investors dealt with corporate accounting scandals, the prospect of continued terrorist attacks, and the threat of  war. But the news isn't all doom and gloom. Here are a few reasons to believe  we may soon be getting over the bear.

Outlook on Canada

With respect to economic growth, Canada has been the country to watch. Last year, Canada enjoyed solid growth of approximately 3.25 per cent. In addition to housing, the bright spots in the Canadian economy are production and employment. Many economists expect Canada to be a leader in the G7 nations this year, with growth of three per cent.

A look at the U.S.

In the U.S., housing and auto sales are up, manufacturing is improving, initial claims for unemployment insurance are good and figures for factory activity and construction spending are positive as well. On top of these developments, President

George Bush is pushing for $670 billion in tax cuts over the next decade and

increased spending on defense. These measures can stimulate the U.S. economy to help it towards a sustainable recovery.

Interest rates at a glance

At the last Federal Open Market Committee meeting in January, the U.S. Federal Reserve opted to leave interest rates unchanged at 1.25per cent. The Fed noted how oil prices and political uncertainty abroad were factors stalling a strong economic recovery. When these risks lift, however, the economic climate will be well on its way to solid growth. Continued low interest rates in 2003 should work to the economy’s advantage.

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