It has been a while since we have seen a September as non-eventful as the one just passed. North American markets continued a positive trend with very little volatility and appeared a little dull as the market was grinding higher.  There continues to be a lot more chatter in the media about the market being over valued with the risk of a correction imminent.

The Federal Reserve did lower rates as anticipated, and this really didn’t amount to any reaction in the market. The trend remains to go a few more cuts just to get in line with the current bond market. This should be a good boost to housing with mortgage rates heading lower. The U.S. is also in the midst of a government shutdown which will be a headwind to their economy. The trend in the U.S. continues to be the build out of data centers, the need for a lot more power for this, and the increased need for more cybersecurity. These trends do not appear to be changing anytime soon. This has created a huge amount of investor money into those sectors, and this bares paying attention to, however; it also leaves a lot of other companies under owned and overlooked.

In Canada, our economy remains weaker as we do not have as big of a presence in the industries mentioned above, but we do have some, and the need for power here is just as important. The U.S. mandate is to keep oil prices low to help with inflation and even though we did have some strength in oil in September, I do eel the trend is lower rather than higher even with the conflicts in the world presently. We have a federal budget coming in November, and this may give some better insight into the direction of Canadian markets moving forward. Until we get better numbers for our economy it will be a challenge into year end.

Overseas and European markets continue their positive performances, and I do feel a lot of this is based on the U.S. dollar declining in value rather than great prospects overseas. We did see some nice movements in Chinese internet and tech companies as the race for the supreme AI model continues to bring in a large amount of investment dollars.

Overall, October can be anything but quiet and with markets at the values they are a pullback (not a major correction) can happen at any time. We are poised for this with some funds set aside on the sidelines to take a little risk off the table currently.