Investment update
Weekly insight into the marketplace.
June 17 to 21, 2024
Canada’s TSX trailed its U.S. counterparts
It was a positive start to the week for most of the major North American stock indexes. On Wall Street, the Dow, S&P 500 and Nasdaq all closed Monday’s sessions in positive territory. Canada’s TSX, which has lagged its U.S. counterparts in recent weeks, was down 0.24% on the day after shares of the influential e-commerce listing, Shopify, dipped. Tuesday saw the resource-heavy TSX make a modest comeback on strong performance from its energy sector, closing the session with a 0.11% gain. The U.S. benchmarks were mixed, with the S&P 500 and Nasdaq ending the day at record-closing levels for a second-straight session after shares of AI chipmaker, Nvidia, climbed 3.5% and overtook Microsoft as the most valuable listed U.S. company, with a market cap of US$3.335 trillion. On Wednesday, with trading volumes low as U.S. markets were closed for the Juneteenth holiday, the TSX lost ground again, closing 0.44% lower. On Thursday, the S&P 500 and Nasdaq fell short of extending their record runs as investors appeared ready to take a breather as trading closed. The Dow posted a 0.77% gain for the day, while the TSX climbed 0.30% on the back of resource and industrial stocks. The pullback on Wall Street continued Friday, with Nividia shares down 6% from their mid-week high. This swing in momentum took a large bite out of the weekly gains for the tech-heavy S&P 500 and Nasdaq. The broader-based Dow led the U.S. benchmarks, gaining 0.04% on the day, and closing 1.45% higher on a weekly basis. The TSX fell as energy stocks weighed on performance.
AI headlines made waves
Investor excitement for all things AI remained a key theme driving market activity through last week, climaxing early Thursday after the CEO of Dell Technologies, Michael Dell, posted on X: "We’re building a Dell AI factory with Nvidia to power Grok for xAI." xAI is the artificial intelligence startup launched by Elon Musk, and Grok is the company's chatbot to compete with the popular ChatGPT. Musk confirmed the news in a response to the post and said that Super Micro would also be providing servers. News of this sent shares in Dell and Super Micro surging, 5% and 9% respectively. Nvidia also saw its stock price jump by 3%. Dell and Super Micro have been building their server capacity in recent months to attract business from companies looking for the processing power necessary to build and integrate AI programs. Earlier in the week, Super Micro announced it was building three new facilities in Silicon Valley to accommodate its AI growth. Last month, Dell reported its revenue had doubled quarter over quarter.
Oil prices climbed
Crude oil futures rose to a seven-week high, with benchmark Brent and West Texas Intermediate futures up by almost 10% since early June. On Thursday, data released by the Energy Information Administration showed that U.S. crude and gasoline stockpiles fell for the first time in weeks, suggesting growth in demand. The same day, U.S. Department of Labor data showed that the number of Americans filing new claims for unemployment benefits fell in the week prior, raising investor hopes that the Federal Reserve's efforts to tame inflation are working and an interest-rate cut could happen this year. A rate cut would make borrowing less expensive and support demand for crude in the world's largest economy.
The stock and bond market*
| Index | Close | Week | YTD |
|---|---|---|---|
| S&P/TSX Composite | 21,554.75 | -0.39% | 2.85% |
| Dow Jones Industrial Average | 39,150.33 | 1.45% | 3.88% |
| S&P 500 Index | 5,464.62 | 0.61% | 14.57% |
| NASDAQ Composite | 17,689.36 | 0.00% | 17.84% |
| 10-year Canadian Bond Yield | 3.29% | -0.01% | 0.19% |
| 10-year U.S. Treasury Yield | 4.25% | 0.05% | 0.37% |
| WTI Crude Oil (US$/barrel) | $80.66 | 2.82% | 12.58% |
| Canadian Dollar | US$0.7301 | 0.27% | -3.31% |
| Bank of Canada Prime Rate 6.95% | |||
*Weekly performance ending Jun 21, 2024. Source: Bloomberg.
Canadian inflation report (June 25): Headline inflation was 2.7% year-over-year (YoY) in April (down from 2.9% in March) marking the fourth consecutive reading within the 1% to 3% inflation target range of the Bank of Canada – the first time this has happened since early 2021. Data for May will be closely watched by bank officials as they continue to navigate the path forward for interest-rate decisions.
Circle these dates
July 1: Canadian markets closed for Canada Day
July 4: U.S. markets closed for Independence Day
July 24: Bank of Canada interest-rate announcement
July 31: U.S. Federal Reserve 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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