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 Q4 2024 edition covers Market Review for first nine months of 2024, a discussion about lower interest rates, as well as the U.S. presidential election. Shiuman’s Corner is about my first ride in the RBC Granfondo Whistler.

 

Markets

Market scorecard as of close on Friday October 25, 2024.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	24,481	-1.4%	16.8%
U.S.	S&P 500	5,808	-1.0%	21.8%
U.S.	NASDAQ	18,519	0.2%	23.4%
Europe/Asia	MSCI EAFE	2,360	-2.0%	5.5%

Source: FactSet

• TSX closed lower in Friday trading. Followed some mild weakness on Thursday that saw the TSX cap a four-day streak of declines.

• US equities finished mostly lower in Friday trading. S&P down 1%+ for the week, snapping six-week streak of gains, while Nasdaq logged its seventh straight weekly gain. Big tech provided notable index support today, but breadth was negative.

• Friday’s early bounce attempt failed to generate lasting momentum, though Mag 7 names remained strong. Not much in the way of catalysts, but also likely something of a waiting game ahead of several big tech reports this week and busier economic calendar.

 

Economy

Canada

• The Bank of Canada (BoC) made the leap to cut the overnight rate by 50 bps on Wednesday, amid accumulating evidence that the economy and labour markets are weakening by more than what is necessary to achieve the 2% inflation target.

• Governor Macklem led off his press conference saying that “we are back to low inflation” in Canada. Rather than focusing on a weak economy and the disinflation pressures that could follow, the BoC highlighted balanced risks on inflation.

• Headline CPI dropped to 1.6% in September from 2.0% in August.

U.S.

• The Citigroup Economic Surprise Index—a measure of how economic data reports compare to consensus expectations—has moved sharply higher since its lows in late August, indicating the economy has remained stronger than anticipated.

• While most economic data has shown signs of improvement in recent months, we have yet to see this play out in the housing market as sales of existing homes in the U.S. fell to a 14-year low in September.

Further Afield

• Eurozone economic activity indicators, which have been declining since the summer, remained at a level consistent with economic stagnation in October. The economy’s ongoing frailty has encouraged the European Central Bank to step up the pace of monetary loosening. Markets are increasingly discounting a further 50 basis points cut at the central bank’s December meeting.

• Analysts expect corporate China to report soft Q3 earnings results. Observers believe the benefits from Beijing’s recent stimulus measures may not flow through to the corporate bottom line until 2025 or later.

 

Notes About Companies in Model Portfolio

• CN Rail (CNR) Tuesday reported its financial and operating results for the third quarter ended September 30, 2024. •Revenues of C$4,110 million, an increase of C$123 million, or 3%. Diluted earnings per share (EPS) of C$1.72, an increase of 2%.

• Waste Connections (WCN) announced Wednesday its results for the third quarter of 2024. Revenues of $2.338 billion, was up 13.3% year over year. Net income of $308.0 million, and adjusted EBITDA of $787.4 million, up 17.3% year over year. The company announced a 10.5% increase to its quarterly dividend.

 

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