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 catch up on the past four weeks’ Weekly Update in the link to my Blog.

Read my latest Smart Investor newsletter on my website. The Q1 2024 edition covers Market Review for 2023, a Turning Point on interest rates, and advantages of Bonds. Plus my Book List for 2023.

 

Markets

Market scorecard as of close on Friday April 26, 2023.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	21,969	0.7%	4.8%
U.S.	S&P 500	5,100	2.7%	6.9%
U.S.	NASDAQ	15,928	4.2%	6.1%
Europe/Asia	MSCI EAFE	2,266	1.3%	1.3%

Source: FactSet

• TSX closed higher in Friday afternoon trading, near best levels. Most sectors higher. Canadian equities recorded a weekly 0.7% gain boosted by staples, energy, consumer discretionary and materials.

• US equities were higher in Friday trading, ending just off best levels. Today's rally followed capped off a week that saw S&P (+2.7%) and Nasdaq (+4.2%) snap their respective three- and four-week losing streaks.

• U.S. stocks’ strong start to the week hit a speed bump as economic data and some high-profile earnings misses stymied the recovery. This marked the busiest week of Q1 2024 earnings season with 42% of S&P 500 companies reporting. Results and company guidance mostly missed expectations, as Technology stocks in particular failed to meet lofty consensus forecasts.

 

Economy

Canada

• The federal budget shortfall to remain virtually unchanged at $39.8 billion in fiscal 2024-25—just below the $40.1 billion deficit maximum. Budget 2024 increases the inclusion rate on capital gains realized annually above $250,000 from 50% to 67% for individuals and on all capital gains realized by corporations and trusts effective June 25, 2024. $4 billion over five years to increase housing supply including $1.5 billion for a new Housing Infrastructure Fund and $1 billion to expedite the construction of new purpose-built apartments.

• Canada’s retail sales edged lower in February, marking a second consecutive month of declines. According to Statistics Canada, retail sales decreased by 0.1% m/m, after contracting 0.3% in January. We think the data underscores the challenges facing Canadian consumers amid higher living and borrowing costs, particularly as Canadian households tend to be more sensitive to changes in interest rates.

U.S.

• The Commerce Department released its first estimate of Q1 2024 GDP growth on April 25. The headline growth rate of 1.6% q/q on an annualized basis missed the consensus forecast of 2.2% and marked the slowest growth rate in nearly two years.

• The biggest detractor from growth was the trade balance, with imports up 7.2% q/q (annualized) and exports up only 0.9% due to weak global demand and a strong dollar.

Further Afield

• The preliminary HCOB Eurozone Composite Purchasing Managers’ Index (PMI) rose to 51.4 in April from 50.3 in March—the highest level since May 2023. This was driven by an improvement in the services sector in France and Germany.

 

Notes About Companies in Model Portfolio

• CN Rail (CNR) reported Tuesday its financial and operating results for the first quarter ended March 31, 2024. Revenues of C$4,249 million, a decrease of C$64 million, or 1%. Operating income of C$1,546 million, a decrease of C$116 million, or 7%.

• Waste Connections (WCN) announced Wednesday its results for the first quarter of 2024. Revenue in the first quarter totaled $2.073 billion, up from $1.901 billion in the year ago period. Operating income was $366.8 million, compared to $314.7 million in the first quarter of 2023. Adjusted net income in the first quarter was $268.7 million, or $1.04 per diluted share, up from $230.4 million, or $0.89 per diluted share, in the prior year period.

• Visa (V) announced Tuesday its fiscal second quarter 2024 financial results. Revenues were $8.78B vs FactSet estimate of $8.62B. payments volume +8% y/y vs. +8% last quarter (constant dollar), cross-border volume +16% y/y vs +16% last quarter, and processed transactions +11% y/y vs +9% last quarter. Cross-border volume increased 16% y/y in constant currency, consistent with last quarter’s 16%.

 

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