Performance
October proved to be another challenging month for equity markets, with both Canadian and U.S. stocks experiencing decline
The S&P/TSX Composite Index fell for the third consecutive month, while the S&P 500 Index fell into correction territory
Canada’s benchmark S&P/TSX Composite Index was 3.4% lower in October
The health care sector was the biggest drag on the index, with a decline of 12.8% in October
Real estate, information technology and utilities fell by 6.3%, 6.2% and 4.7%, respectively
Consumer staples was the only positive sector, gaining 3.7%
Small-cap stocks, as measured by the S&P/TSX SmallCap Index, fell 2.7% for the month
S&P 500 Index, rose 0.2% in October
Seven of the underlying sectors were in the red for the month, with energy and consumer discretionary as the leading detractors, falling 3.8% and 2.2%, respectively
Utilities was the top-performing sector, gaining 3.7%
International stocks, as measured by the FTSE Developed ex-US Index, declined 2.0% during the month, while emerging markets fell 1.4%
Fixed Income
Canadian investment grade bonds, as measured by the FTSE Canada Universe Bond Index, rose 0.4% during the month
The key global investment grade bond benchmark and global high-yield issues both fell 1.2%
Commodities
Natural gas prices rose 22.1% during the month, while the price of a barrel of crude oil fell 10.8%
Copper declined 2.4%, while silver and gold had a positive month, rising 2.2% and 7.9%, respectively
Inflation
Inflation in Canada fell to 3.8% year-over-year in September, led by declines in costs for food and durable goods.
The Canadian economy created 63,800 jobs in September, as the nation’s unemployment rate stood at 5.5%
At its October 25 meeting, the Bank of Canada left its key interest rate unchanged at 5% for the second consecutive month
U.S.
The U.S. resolved its debt ceiling crisis earlier this year (temporarily, at least), but potentially larger fiscal threats are on the horizon. Interest expenses on the nation’s US$34 trillion national debt are increasing due to higher interest rates and a rapid expansion in the amount of debt itself.
According to the Congressional Budget Office, interest costs could nearly double as a percentage of GDP from 1.9% in 2023 to 3.6% by 2033.
Net interest expense is projected to exceed spending on national defence by 2028, and it could get very close to what the country spends annually on Medicare by the same time
This document was prepared by the Investment Products & Platforms Team. The opinions expressed in this document do not necessarily reflect the opinions of iA Private Wealth Inc. 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. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any securities. Contents copyright by the publishers. The information contained herein may not apply to all types of investors.
Comments