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 May 24, 2023.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	22,321	-0.6%	6.5%
U.S.	S&P 500	5,305	0.0%	11.2%
U.S.	NASDAQ	16,921	1.5%	12.7%
Europe/Asia	MSCI EAFE	2,359	-0.9%	5.5%

Source: FactSet

• Canadian equities finished the week down 0.6%. The S&P/TSX Composite Index has returned approximately 8% on a total-return basis year to date, driven by strength across a number of sectors. The largest contributors are stocks within the Energy, Financials, and Materials sectors.

• U.S. equities markets were positive with the Nasdaq up 1.5% for the week.

 

Economy

Canada

• Recent Canadian inflation data continues to provide the Bank of Canada (BoC) with affirmative evidence that its monetary policy actions appear to be taking hold. Wednesday’s inflation report showed that the Consumer Price Index (CPI) continues to inch closer to the 2% target rate.

U.S.

• Fed Chair Jerome Powell stated at his press conference on May 1 that lowering borrowing costs would not be appropriate until the central bank has greater confidence that inflation is on a sustainable path toward 2%. Nonetheless, it appears the economy is still growing steadily, although recent reports on manufacturing, retail sales, and payrolls suggest demand is moderating.

Further Afield

• UK headline inflation dropped to 2.3% y/y in April from 3.2% y/y the previous month thanks to lower energy utility prices. However, inflation data could push higher again in the near future as wage growth remains above 5%. UK Prime Minister Rishi Sunak announced a general election would take place on July 4.

• China announced a series of policies to support the housing market on May 17. Key measures from the People’s Bank of China (PBoC), the country’s central bank, include lowering down payment requirements to 15% for first-home purchases and 25% for second-home purchases. In addition, the PBoC will provide RMB300 billion in a relending program to local governments to acquire properties and convert them into social housing.

 

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