| A few topics our newsletter touches on this month:
Our Thoughts: Winterlude & “Steady as She Goes” markets Happy Winterlude! Although the mild weather hasn’t been great for the canal, it’s very nice for other outside activities (see links to “Other Things” section below). For those of us not escaping to Florida sunshine, we need to make the most of it! A nice fourth quarter rally like we had in 2023 can sometimes lead to the market taking a breather in January, but things ended up being “steady as she goes” with equities gaining a bit for the month. Given the anticipation for lower interest rates, all eyes remain focused on the world's central banks with most banks maintaining levels where they are. While Bank of Canada Governor Tiff Macklem emphasized that it's too soon to talk about rate cuts, a subtle shift in his language suggested growing confidence in inflation's downward trajectory. That said, the persistent issues of shelter costs, exacerbated by housing supply remains problematic. Supply chain issues continue as well, adding to some stickiness to inflation. The bond market reacted by yields rising a bit for the month, factoring in a delay in rate cuts. Central bank policy, slowing global growth and cooling inflation will continue to be the main drivers of financial markets in 2024. Based on economic readings to date, slower growth will be more in the nature of a “soft landing’ and rate cuts should ultimately stimulate economic activity. Interesting fact: fueled by its move into AI through its investment in ChatGPT, Microsoft became the second company to reach a market cap of $3 trillion, joining Apple which achieved this last year. By the numbers (January): The TSX was up 0.6% and the S&P 500 was up 1.7% in U.S. dollars (3.1% in $CAD). The Europe, Australia & Far East index (EAFE) was up 2%, while the Emerging Markets index was down 3.3%. The Canadian bond universe was down 1.4%.
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