Investment update
Weekly insight into the marketplace.
September 9 to 13, 2024
Stock markets recovered early-September losses
The major North American stock indexes rallied on Monday, as investor sentiment improved following the previous week’s sell-off. Canada’s TSX closed 1.08% higher, while the U.S. benchmarks each gained around 1.2%. Tuesday brought mixed results. Plunging oil prices weighed on the TSX, and these losses offset positive performance from other sectors. Overall, the commodity-heavy index was down 0.1% for the day. On Wall Street, the Dow posted a 0.23% decline, while the S&P 500 and Nasdaq posted gains of 0.45% and 0.84%, respectively. Trading remained choppy early Wednesday, as investors reacted to the previous evening’s presidential debate, as well as inflation data that dashed hopes for a large interest-rate cut by the U.S. Federal Reserve (the Fed). But the Wall Street benchmarks rallied into the closing bells. The Nasdaq led the way with a 2.17% gain, as tech stocks came back into favour. The TSX gained 0.9%, supported by strong performance from the base-metal, industrial and tech sectors. On Thursday, the markets continued to run hot, with the tech-heavy Nasdaq tacking another 1.02% onto its weekly return. The TSX was also up, closing 1.14% higher. The positive momentum carried over into Friday, as tech stocks continued to rally. All the North American benchmarks closed higher on the day. It was the second-straight record close for the TSX, and the best week of 2024 so far on Wall Street.
U.S. inflation data tempered rate cut expectations
On Wednesday, the U.S. Bureau of Labor Statistics reported that the consumer price index (CPI) increased 0.2% last month after rising 0.2% in July. Year-over-year, the CPI advanced 2.5% – the smallest annual rise since February 2021, and down from a 2.9% annual advance reported in July. But core CPI – which excludes food and energy costs, and is considered a better gauge of underlying inflation by economists – increased 0.3 % in August (the most in four months) and was up 3.2% on an annual basis. Shelter costs drove the increase. Overall, the news supported investor expectations for a rate cut to follow the Fed’s policy-setting meetings this week, but dampened hopes that the cut might come in above 25 basis points.
Oil prices remained volatile
After plummeting to their lowest levels since December 2021 on Tuesday, oil prices began to rebound on Wednesday, as Hurricane Francine approached the Gulf of Mexico. The storm took several offshore drilling sites and refineries offline, which accounts for approximately 15% of U.S. production. Benchmark West Texas Intermediate crude futures closed the week 1.45% higher. So far this quarter, oil prices are down roughly 15%, as investors weigh the impact of shrinking demand from China and a slowing U.S. economy on the outlook for the commodity. Earlier this month, in a move to support prices, OPEC+ and its allies announced that they would delay plans to boost output.
The stock and bond market*
| Index | Close | Week | YTD |
|---|---|---|---|
| S&P/TSX Composite | 23,568.65 | 3.46% | 12.45% |
| Dow Jones Industrial Average | 41,393.78 | 2.60% | 9.83% |
| S&P 500 Index | 5,626.02 | 4.02% | 17.95% |
| NASDAQ Composite | 17,683.98 | 5.95% | 17.80% |
| 10-year Canadian Bond Yield | 2.91% | -0.05% | -0.19% |
| 10-year U.S. Treasury Yield | 3.66% | -0.06% | -0.22% |
| WTI Crude Oil (US$/barrel) | $68.65 | 1.45% | -4.19% |
| Canadian Dollar | US$0.7361 | -0.10% | -2.52% |
| Bank of Canada Prime Rate 6.45% | |||
*Weekly performance ending September 13, 2024. Source: Bloomberg.
U.S. Federal Reserve interest-rate announcement (September 18): In July, the Fed held its benchmark interest rate steady in a range of 5.25% to 5.50%, but Fed Chair Jerome Powell signaled that cuts could begin in September. Markets are expecting the Fed to announce a 25-basis point cut on Wednesday, with investors likely to react to policy-maker statements following the decision.
Circle these dates
October 14: Canadian markets closed for Thanksgiving Day
October 23: Bank of Canada interest-rate announcement and Monetary Policy Report
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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