Investment update
Weekly insight into the marketplace.
September 23 to 27, 2024
Stock markets broke records
The major North American stock markets made small gains on Monday to kick off the last full week of September, which has historically been the worst week of the year for markets. Canada’s resource-heavy TSX edged up 0.11% on the back of energy and base metal stocks, while Wall Street benchmarks – the Dow and the S&P 500 – added to recent record highs. It was much of the same on Tuesday, with all the major stock indexes making modest gains after China’s central bank announced stimulus measures to support its sagging economy. Wednesday brought mixed performance. The TSX lost 0.19%, as the energy sector weakened and oil prices fell. The U.S. benchmarks also struggled, with the Dow and S&P 500 giving up 0.70% and 0.19%, respectively, while the Nasdaq remained flat. On Thursday, the TSX rose 0.50% to close above the 24,000 mark for the first time, as energy sector weakness was countered by strength across other sectors. The U.S. benchmarks also closed higher, with the S&P 500 again setting a record. Micron Technology led chip stocks higher, surging 17% after the company forecast higher-than-expected revenue for the next quarter in its latest earnings report. Friday brought mixed performance. The Dow closed at a record high, but the S&P 500 and Nasdaq posted small losses as the tech sector cooled off. The TSX was also down on a daily basis.
The OECD released an upbeat global economic forecast
In its latest outlook released on Wednesday, the Paris-based Organization for Economic Co-operation and Development (OECD) said that the global economy is “turning the corner,” citing healthy gross domestic product (GDP), coupled with easing inflation and monetary policy. The OECD forecasts global growth of 3.2% for this year and next, supported by trade growth, rising real incomes and declining interest rates. For Canada, the OECD projects 1.1% growth in 2024, rising to 1.8% in 2025. It predicts U.S. growth will slow from 2.6% in this year to 1.6% next year. “Declining inflation provides room for an easing of interest rates, though monetary policy should remain prudent until inflation has returned to central bank targets,” said the OECD secretary-general, Mathias Cormann.
U.S. economic data lifted markets
The Commerce Department’s third and final estimate of second-quarter GDP, released on Thursday, confirmed the U.S. economy grew at a strong 3% pace in Q2. The report also showed that inflation is slowly returning to the U.S. Federal Reserve’s (the Fed’s) 2% target. The personal consumption expenditures index (PCE), which is the Fed’s preferred inflation gauge, rose at a 2.5% annual rate in Q2, down from 3% in Q1. Core PCE inflation, which excludes volatile food and energy costs, grew at a 2.8% pace in Q2, down from 3.7% in the previous quarter. A separate report from the Labor Department showed that applications for unemployment benefits fell to a four-month low despite a hiring slowdown. On Friday, the release of August’s PCE data showed core PCE rose 0.1% from July, slower than expected. Year over year, overall PCE increased 2.2%, its lowest annual increase since February 2021.
The stock and bond market*
| Index | Close | Week | YTD |
|---|---|---|---|
| S&P/TSX Composite | 23,956.82 | 0.37% | 14.31% |
| Dow Jones Industrial Average | 42,313.00 | 0.59% | 12.27% |
| S&P 500 Index | 5,738.17 | 0.62% | 20.30% |
| NASDAQ Composite | 18,119.59 | 0.95% | 20.71% |
| 10-year Canadian Bond Yield | 3.01% | 0.07% | -0.09% |
| 10-year U.S. Treasury Yield | 3.75% | 0.02% | -0.13% |
| WTI Crude Oil (US$/barrel) | $68.18 | -5.20% | -4.84% |
| Canadian Dollar | US$0.7399 | 0.39% | -2.01% |
| Bank of Canada Prime Rate 6.45% | |||
*Weekly performance ending September 27, 2024. Source: Bloomberg.
Economic data: This week’s releases include manufacturing and service sector data for the U.S. and Canada. Speeches by Federal Reserve officials, as well as U.S. labour market and energy supply reports, will also be in focus.
Circle these dates
October 14: Canadian markets closed for Thanksgiving Day
October 23: Bank of Canada interest-rate announcement and Monetary Policy Report
November 6 to 7: U.S. Federal Reserve policy meetings and interest-rate announcement
The commentary in this report is based on current market conditions and market media sources available to the public and may change without prior warning at any time. The forecasts provided herein are not guarantees of future performance and include risks, uncertainty and assumptions. While Co-operators Life Insurance Company (“Co-operators”) believes these assumptions are reasonable, there is no guarantee they will be confirmed. This report is not a guarantee of future investment performance, nor should undue reliance be placed on this report. This report is provided as a general source of information for a specific point in time and should not be considered solicitation to buy or sell any investment. Nothing contained in this report constitutes investment, legal, tax or other advice. The content in this report should not be relied upon in making an investment or other decision, and individuals should obtain relevant and specific professional advice and read the terms and conditions contained in the relevant offering documents carefully before any investment decision is made. Co-operators is not responsible for any loss or damage as a result of reliance on the information contained in this report. Co-operators makes no representations or warranties as to the information contained herein and does not guarantee its accuracy, timeliness, completeness or usefulness. Co-operators is committed to protecting the privacy, confidentiality, accuracy and security of the personal information it collects, uses, retains and discloses in the course of conducting business. Please visit cooperators.ca/privacy for more information. Co-operators® is a registered trademark of Co-operators Group Limited and is used with permission. Investing in your future. Together.TM is a trademark of Co-operators Group Limited. If you are a client who has received this, and you have questions or want to discuss your investments, please contact your Financial Advisor.
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