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 Q2 2024 edition covers Market Review for year-to-date 2024, featuring an article on the Role of Artificial Intelligence.

 

Markets

Market scorecard as of close on Friday June 7, 2023.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	22,007	-1.2%	5.0%
U.S.	S&P 500	5,347	1.3%	12.1%
U.S.	NASDAQ	17,133	2.4%	14.1%
Europe/Asia	MSCI EAFE	2,369	1.3%	5.9%

Source: FactSet

• Canadian equities finished lower Friday, near worst levels. Most sectors lower. TSX logged a 1.2% weekly decline, lower for a third-straight week, off more than 2% from its 21-May high.

• US equities ended lower Friday afternoon, with big tech mostly down. Still, Dow, S&P and Nasdaq all locked in good weekly gains. S&P 500 was up 1.3% for the week.

 

Economy

Canada

• The Bank of Canada (BoC) lowered its policy rate by 25 basis points on June 5, joining the Swiss National Bank and Sweden’s Riksbank as the first G10 central banks to cut interest rates this year. The BoC gave limited guidance on future rate cuts, but RBC Capital Markets and Bloomberg consensus expect the overnight rate will be lowered to four percent by year-end from five percent at the start of the year.

• BoC governor Tiff Macklem indicated that it is “reasonable to expect” further rate cuts if economic growth and inflation evolve in line with the BoC’s forecasts.

• Canada’s economic growth slowed amid tighter financial conditions. Canadian GDP expanded at a 1.7% q/q annualized pace in Q1 2024, lower than the BoC’s forecast of 2.8%.

U.S.

• Treasuries extended May’s positive price performance into the first week of June. The main driver of these bond gains, in our view, is the recent U.S. economic data showing signs of slowing domestic growth.

• Declining commodity prices were another likely tailwind for bonds last week. The Bloomberg Commodity Index is down nearly 5% since the start of last week, which has been led by a drop in energy prices. Lower input costs are a potentially helpful constraint on rising consumer price inflation.

Further Afield

• The European Central Bank (ECB) delivered on its promise to cut interest rates by 25 basis points (bps) to 3.75% at the June meeting on Thursday.

• Hong Kong’s high-end residential real estate market recovered in Q1 2024. The removal of property-cooling measures has attracted buyers back to the market. According to a report from Knight Frank, a global real estate consultant and agency firm, Hong Kong recorded 36 property transactions valued at US$10 million or more in the first quarter.

 

 

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