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Atlantic Trust assesses key macro issues impacting U.S. and international markets

Leading indicators suggest the U.S. economy is getting back on track

ATLANTA, April 8, 2014 /PRNewswire/ - Recent economic news has been mostly disappointing, but leading indicators suggest stronger growth ahead, according to the experts at Atlantic Trust, the U.S. private wealth management division of CIBC (NYSE: CM) (TSX: CM).

While U.S. retail, manufacturing and construction were likely impacted by the severe weather patterns evident in many parts of the country this winter, Atlantic Trust's Chief Investment Officer David L. Donabedian, CFA, says most of the activity in these sectors has simply been delayed rather than lost and will be made up in the months ahead.

"Economic indicators for March support the notion that the economy is getting back on track," he says. "We are sticking with our expectation of a solid year from the U.S. economy but are watching the data closely."

Federal Reserve policy is always a critical variable for financial markets, but Donabedian says it is especially so this year as the markets are dealing with a "new Fed" in two respects: a change in leadership from Ben Bernanke to Janet Yellen; and, a change in policy as the central bank phases out quantitative easing and contemplates raising short-term interest rates. "Our base case on the Fed continues to be that policy change will inject more volatility into both stock and bond markets, but the reason for the policy change—rising confidence in a post-bubble normalization of the economy—is fundamentally bullish for equities," says Donabedian.

In many ways, the short-term challenges facing the U.S. seem relatively tame compared to a variety of big macro issues in other parts of the world. This is one reason why equity valuations in the U.S. are higher.

Recent events in Russia and Ukraine have injected both economic and geopolitical uncertainties into the outlook. The primary economic issue relates to reliance of western Europe on Russian oil and gas supplies. There is a risk that Russia squeezes or cuts off that supply as a salvo in the sanctions battle, he says. "However, a bigger risk—and a truly global one—would be a further incursion by Russia into Ukrainian territory beyond Crimea," adds Donabedian. "The situation is highly unpredictable, and we are watching it closely."

Emerging markets represent the most attractive valuations and long-term growth potential in global equity markets, and also represent more than half of the world's economic activity. While it is an important strategic asset class, questions about China along with negative inflation and currency trends in a handful of other emerging economies mean it may take a while longer for these markets to return to favor, he says.

The experienced team of investment strategy professionals at Atlantic Trust designs investment portfolios that seek to reduce the impact of market volatility while the team also attempts to capitalize on a broad range of investment opportunities on behalf of clients. Visit www.atlantictrust.com for more information, or explore Atlantic Trust's Online Resource Center for additional investment and wealth management resources.

About Atlantic Trust

Atlantic Trust is one of the nation's leading private wealth management firms, offering integrated wealth management for high-net-worth individuals, families, foundations and endowments. The firm considers clients' financial, trust, estate planning and philanthropic needs in developing customized asset allocation and investment management strategies. Experienced professionals deliver a broad range of solutions, including proprietary investment offerings and a robust open architecture platform of traditional and alternative managers. Atlantic Trust operates in 12 full-service locations throughout the U.S. with $24.0 billion in assets under management (as of December 31, 2013). For more information, visit www.atlantictrust.com.

About CIBC

CIBC is a leading Canadian-based global financial institution. Through our Retail and Business Banking, Wealth Management and Wholesale Banking businesses, CIBC provides a full range of financial products to individual, small business, commercial, corporate and institutional clients in Canada and around the world.

CIBC Wealth Management provides relationship-based advisory services and an extensive suite of leading investment solutions to meet the needs of personal, institutional and high-net-worth clients through an extensive distribution network that includes CIBC Private Wealth Management, CIBC Wood Gundy and CIBC Investor's Edge. Our asset management, retail brokerage and private wealth management businesses combine to create an integrated offer, delivered through nearly 1,500 advisors across Canada. In addition, CIBC Asset Management provides global money manager services to institutional and high-net-worth clients and industry-leading retail investment solutions through our two mutual fund families—CIBC and Renaissance—and the CIBC family of managed portfolio solutions.

SOURCE Atlantic Trust Private Wealth Management

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