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 November 1, 2024.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	24,255	-0.9%	15.7%
U.S.	S&P 500	5,729	-1.4%	20.1%
U.S.	NASDAQ	18,240	-1.5%	21.5%
Europe/Asia	MSCI EAFE	2,336	-1.0%	4.5%

Source: FactSet

• TSX higher in Friday afternoon trading, off best levels. Most sectors higher. Canadian equities finished lower in Thursday afternoon trading, near worst levels. TSX down 0.9% for the week.

• US equities higher in Friday trading, though ended well off best levels. Stocks reversed some of Thursday's selloff, though S&P 500 down for second-straight week and Nasdaq broke seven-straight weekly gains.

• In recent months, sectors outside of technology – such as utilities, real estate, and financials for example, have contributed more meaningfully to U.S. stock market gains. We believe this could mark an important and healthy development, as it would suggest a broadening in growth with more companies and industries benefitting, providing a constructive backdrop for investors and their portfolios.

• The robust selloff in Treasuries has lifted yields some 60 basis points (bps) higher since the last week of September, as investors now anticipate the Federal Reserve to gradually reduce borrowing costs instead of the aggressive loosening that was previously priced into markets. The sharp drop in Treasury prices has shaved off over 2.4% of returns on the Bloomberg U.S. Treasury Index, trimming gains on the year to 1.3%.

 

 

Economy

Canada

• Canadian GDP for August came in at 1.3% y/y (flat m/m), slightly below expectations. The BoC has emphasized that growth needs to pick up to an above-trend pace to absorb slack and keep inflation from slowing too much. A Canadian GDP that is still tracking meaningfully below potential should keep large BoC rate cuts on the table.

• The federal government announced lower immigration targets for the next several years, including cutting back on the number of new permanent residents and a planned reduction in temporary residents. It suggested those measures will cause the country’s population to decline slightly in 2025 and 2026.

U.S.

• U.S. GDP growth remains strong despite high interest rates, with an annualized quarter-over-quarter rate of 2.8% in Q3, mainly driven by a resilient consumer and a jump in government spending. This Q3 report was slightly below our and the market’s expectation of 3%.

• October nonfarm payrolls rose 12K month over month, well-below consensus 110K-120K and lowest monthly gain since Dec-20.

Further Afield

• The new Labour government in the U.K. announced an expansionary Budget, to be financed by increased taxes and additional borrowing. Increased spending will go

towards public sectors such as health and education. Raising taxes by £40 billion annually (1.3% of GDP) will bring the tax burden to the highest level ever, with taxes as a percentage of GDP reaching 38.3%.

 

 

Notes About Companies in Model Portfolio

• Apple (AAPL) The Company posted quarterly revenue of $94.9 billion, up 6 percent year over year, and quarterly diluted earnings per share of $0.97. Diluted earnings per share was $1.64, up 12 percent year over year when excluding the one-time charge recognized during the fourth quarter of 2024. The staggered release of Apple Intelligence combined with the age of the installed base is likely to drive an upgrade opportunity across the different regions over the iPhone 16 and iPhone 17 cycle, and F1Q25 only represents the early days of an upgrade cycle that is likely to last multiple years.

• Berkshire Hathaway (BRK.A/BRK.B) released on Saturday its earnings for 2024 Q3 and first nine months. Net earnings for the nine months was $69.3 billion, up from $58.6 the previous year. The company closed out the third quarter with a record $325.2 billion in cash and cash equivalents, up from $276.9 billion at the end of June 2024 (due primarily to $36.1 billion of net sales from its stock holdings as free cash flow turned negative during the quarter).

• Visa (V) reported Tuesday 2024 Q4 and full-year results. 2024 net revenues of $35.9B, an increase of 10%. Net income was $19.7B, a 14% increase. The board of directors increased Visa’s quarterly dividend by 13% to $0.59 per share. Payment volume grew at 6% overall, with international leading U.S. volume.

 

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