NEW YORK ( TheStreet) -- In the past, I have lauded Canada as an attractive destination for conservative investors looking for safe developed market exposure. Boasting a strong financial system and a relatively stable government, the Canadian markets have managed to hold up relatively well compared to troubled regions like the European Union.
At the start of the week, investors received some disappointing news regarding the near-term prospects for Canada's economy. On Monday, the Organization for Economic Cooperation and Development announced that it had taken the axe to the nation's growth forecasts. The group pointed to easing growth in the U.S. and a strong Canadian dollar as being among the most glaring hurdles.
The mood towards Canada is not entirely glum. On the contrary, the OECD helped to ease some of the alarm resulting from its downward revision, mentioning that the expected 2.2% GDP expansion in Canada's economy in 2011 will still make it a top performer among the Group of Seven nations.It will take time to determine whether Canada lives up to the predictions by the OECD. In the nearer term, I encourage investors to keep a close watch over the earnings calendar. During the latter half of this week, investors will gain important insight into the state of the Canadian marketplace when a group of top banks, including Royal Bank of Canada (RY - Get Report), Toronto-Dominion Bank (TD - Get Report), Canadian Imperial Bank of Commerce (CM - Get Report) and Bank of Nova Scotia (BNS - Get Report) are scheduled to report earnings. The excitement will spill over into the first full week of December when the Bank of Montreal (BMO - Get Report) is expected to report its quarterly earnings numbers and outlook next Tuesday. Many have expressed concerns that the firmness of the Canadian financial system has been tested by the deluge of troubling macroeconomic turbulence that has plagued the global markets in recent months. The Globe and Mail notes that while analysts have been quick to say that a repeat of 2008 is not in the cards, the outlook for this sector is cloudy as continued economic headwinds from regions like the EU remain a cause for concern.