Below is a summary of some of the relevant news items from the Capital Markets and the Economy from the past week extracted from RBC Global Insights and FactSet Research.
You can view the past four weeks’ Weekly Update in the link to my Blog.
Read my latest Smart Investor newsletter on my website. The Q3 2023 edition covers Market Review, Concentration of Returns in U.S. equities and Estate Planning Basics.
Markets
Market scorecard as of close on Friday September 15, 2023.
| Country | Equity Indices | Level | 1 week | YTD |
| Canada | S&P/TSX Composite | 20,622 | 4.0% | 6.4% |
| U.S. | S&P 500 | 4,450 | 1.0% | 15.9% |
| U.S. | NASDAQ | 13,708 | 0.9% | 31.0% |
| Europe/Asia | MSCI EAFE | 2,108 | 2.6% | 8.5% |
Source: FactSet
-
TSX closed higher Friday afternoon after a rally into the close. Sectors mixed. TSX finished with a weekly gain.
-
US equities closed lower in fairly quiet Friday trading, ending near worst levels. Major indices pared Thursday's gains and logged a mostly lower finish for the week. Risk sentiment picked up a bit last week. Some focus on pickup in China recovery expectations and fresh stimulus measures. Peak policy another area of focus ahead of Fed meeting this week.
Economy
Canada
-
Despite a material increase in interest rates over the past year, Canadian residential mortgage delinquency rates are still relatively low by historical standards. We believe this can be partly attributable to stronger-than-expected labour market conditions and the unemployment rate remaining below pre-pandemic averages.
U.S.
-
U.S. inflation picked up in August, with the Consumer Price Index (CPI) rising 0.6% from July’s level. Higher food and energy costs accounted for much of the move, as so-called core prices outside those areas rose only 0.3%.
-
A partial federal government shutdown could occur on Oct. 1 if Congress fails to pass annual appropriation bills or a stopgap funding measure before that date. One legislative hang-up is the level of spending. Only a quarter of federal spending would be impacted by a shutdown, and key payments like Social Security, Medicare, and Treasury debt servicing would be unaffected.
-
The Federal Reserve is set to announce its latest policy rate decision on Wednesday, accompanied by updated economic projections. Futures markets expect the Fed to keep interest rates on hold at 5.50% while maintaining the flexibility to increase rate further as inflation remains above target.
Further Afield
-
A “solid majority” within the European Central Bank (ECB) Governing Council voted in favour of raising interest rates by 25 basis points (bps) on Sept. 14 to reach a deposit rate of 4%, according to ECB President Christine Lagarde—the tenth consecutive hike since July 2022.
-
Japan equities reacted positively to Bank of Japan (BoJ) Governor Kazuo Ueda’s comment that “ending negative interest rates is an option,” which he made during an interview with the Yomiuri Shimbun newspaper on Sept. 9. The yield on 10-year Japanese Government Bonds (JGBs) rose to 0.716% during the week, a level not seen since 2014, and the yen temporarily appreciated versus the dollar to the 145 range.
Notes About Companies in Model Portfolio
-
Apple (AAPL) on Tuesday debuted iPhone 15 Pro and iPhone 15 Pro Max with upgraded cameras (high resolution and 5x Telephoto lens), and featuring USB-C charger. Apple also introduced AirPods Pro 2nd generation and Apple Watch Series 9.
-
In our view, we believe the key takeaway from the product launches include focus remains on hardware differentiation through more aggressively innovating on the underlying silicon (A17 Pro), and driving software features on improved chipset capabilities.
-
Feel free to contact me with any questions and/or to discuss investment ideas.
I appreciate the opportunity to serve you and look forward to continuing to help you accomplish your long-term financial goals.
Regards,
Shiuman