Performance
Global markets started the year on a high note
Equities and bonds both posted positive returns
European equities led the gains (strength in banking, health care and customer products and services industries)
Low exposure to tech sector
Most sectors of the MSCI AC World Index delivered positive returns in January
Top performers included communication services, health care and financials
Information technology lagged due to volatility in global tech stocks
Value stocks outperformed growth stocks
Canada
Canadian equities rose to start 2025
Gains were mainly due to materials and information technology sectors
Bottom performers for January included consumer staples, health care and real estate
Bank of Canada lowered its benchmark interest rate by 25 basis points to 3%
This reflected the uncertainties with potential U.S. trade tariffs
U.S.
U.S. equities advanced in January
There was a positive outlook on the markets with Trumps promises of deregulation and tax cuts
Strong earnings also contributed to gains seen in January
Near the months end how much the market relies on tech stocks was shown
This followed concerns with DeepSeek (Chinese AI developer)
Technology was the only sector to decline
Top performers for the month included financials, health care and consumer services
Mid caps outperformed small and large caps
January 31st 2025 saw volatility as Trump announced Tariffs on Canada, Mexico and China
Later that same day he agreed to a 30 day pause period for Mexico and Canada to implement the tariffs
These tariffs being implemented are projected by experts to have quite broad economic impacts
Risk of disrupting supply chains
Causing inflationary pressure
Sparking fears of trade war
U.S. Federal Reserve maintained interest rates at 4.25-4.5%
This suggests strong economic growth
December unemployment fell to 4.1%
GDP expanded at an annualized rate of 2.3% in Q4 2024
Fixed Income
U.S. and Canadian ten-year treasury bond yields declined in January
Yields rose in the U.S. during the first half of the month
An optimistic inflation report drove equity markets higher and yields lower in January
Commodities
Generally commodities rose during January
Gold and other metals rose sharply driven by trade tensions as safe-havens
Oil prices rose reflecting colder winter conditions than expected
Also due to U.S. sanctions on Russia
Natural gas prices fell in January
Article information provided by Fidelity Investments
For the full article: extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.fidelity.ca/content/dam/fidelity/en/documents/reviews/month-in-review.pdf
The comments contained herein are a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. This blog was prepared by Alison Cannell, for the benefit of Alison Cannell, Financial Advisor with Cannell Wealth Management Inc., a registered trade name with Investia Financial Services Inc., and does not necessarily reflect the opinion of Investia Financial Services Inc. The information contained in this blog comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability.
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