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 21, 2024.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	21,545	-0.4%	2.8%
U.S.	S&P 500	5,465	0.6%	14.6%
U.S.	NASDAQ	17,689	0.0%	17.8%
Europe/Asia	MSCI EAFE	2,308	0.0%	3.2%

Source: FactSet

• Canadian equities finished slightly lower Friday, off worst levels. Sectors were mixed. TSX posted a 0.4% weekly decline, down for a fifth straight week.

• US equities were narrowly mixed in very quiet Friday trading. The S&P 500 ended with a modest weekly gain (+0.6%), up for eighth week in past nine, while Nasdaq Composite unchanged on the week.

Excerpt from Global Insight Weekly by RBC Wealth Management Global Portfolio Advisory Committee (read the full article here):

• The S&P 500 has continued to surge amid rather low volatility, making new high after new high—31 of them in 117 trading days so far this year. Just one stock, AI chipmaker NVIDIA, represents 33 percent of the S&P 500’s year-to-date gain. Seven stocks make up another 38 percent of the gain, six of which are also leveraged to AI (pharmaceutical company Eli Lilly being the exception).

• We think the S&P 500 has gotten ahead of itself and the U.S. market is due for a normal pause or pullback in the coming weeks or months. Now is not the time to chase the biggest winners, in our view.

 

Economy

Canada

• We (RBC Economics) expect Canadian inflation numbers on Tuesday will show further signs of gradual easing in price pressures. Consumer price index growth should edge down to 2.6% year-over-year from 2.7% in April. That would mark the fifth consecutive month that annual price growth is within the Bank of Canada’s 1% to 3% inflation target range.

U.S.

• U.S. retail sales rose modestly in May following a downwardly revised drop in April, suggesting consumers are facing greater financial strain in the current environment.

• Consumer sentiment from the University of Michigan Sentiment Index plunged to a seven-month low in early June as Americans are growing more concerned about inflated prices.

Further Afield

• The Bank of England (BoE) kept the Bank Rate unchanged at 5.25% in line with the market and our expectations. UK headline CPI inflation dropped to 2% y/y in May from 2.3% y/y in April.

• China announced a series of economic activity data for May. Overall, exports and manufacturing investment posted strong gains while domestic consumption remained relatively soft. We don’t think there are material changes to the economic performance—it is neither accelerating nor deteriorating.

 

Notes About Companies in Model Portfolio

• Johnson & Johnson (JNJ) announced Friday that it has successfully completed the acquisition of Proteologix, Inc., a privately-held biotechnology company focused on bispecific antibodies for immune-mediated diseases, for $850 million in cash. Acquisition includes two pre-clinical bispecific antibodies for patients living with atopic dermatitis (also referred to as eczema) and other immune-mediated diseases.

 

 

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