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 8, 2024.

Country	Equity Indices	Level	1 week	YTD
Canada	S&P/TSX Composite	24,759	2.1%	18.1%
U.S.	S&P 500	5,996	4.7%	25.7%
U.S.	NASDAQ	19,287	5.7%	28.5%
Europe/Asia	MSCI EAFE	2,337	0.0%	4.5%

Source: FactSet

• U.S. equities finished Friday higher in uneventful trading. Nasdaq and S&P 500 set fresh all-time highs with large weekly gains. S&P 500 was up 4.7% for the week, briefly breaking through 6,000 points on Friday. Canadian equities were up 2.1% for the week.

• If you’re interested to dive deeper into the possible impact of the U.S. presidential election:

• • Read the article “Back to the future” in the Global Insight Weekly

• • RBC Global Asset Management Chief economist Eric Lascelles shares his thoughts on the post-election day landscape and provides some highlights on what to expect next. Click to watch video of his commentary.

 

Economy

Canada

• On November 5^th, the Bank of Canada published a summary of its deliberations leading to last month’s 0.50% interest rate cut. The summary highlighted policymakers’ growing confidence that inflation pressures are easing. While officials considered the merits of a smaller 0.25% move, they ultimately settled on a 0.50% cut due to continued labour market softness and a need to stimulate economic growth.

• Activity in Canada’s manufacturing and services sectors picked up in October as interest rate cuts by the central bank added to business and consumer optimism. Canada’s Manufacturing Purchasing Managers’ Index (PMI), which reflects trends in production, inventory, hiring, and new orders, rose to 51.1 from 50.4 in September, its highest level in nearly two years.

U.S.

• The Federal Reserve followed up its 50 basis points (bps) rate cut in September with another 25 bps reduction last week, as was widely anticipated, to bring its target rate to 4.50%–4.75%. The Fed cited generally cooler labor market conditions while judging inflationary risks to now be roughly “in balance.”

• Despite the cut to short-term policy rates, Treasury yields have broadly continued their ascent in the aftermath of the election, with the benchmark 10-year Treasury yield trading as high as 4.5%, up from a low of just 3.6% in September.

Further Afield

• Former President Donald Trump’s return to the White House brings considerable uncertainty in terms of trading policy and geopolitics for Europe. Tariffs would be a headwind to already meager euro area growth, with Germany and Italy most affected as their exports to the U.S. represent more than 4% and 3% of their respective national GDP.

• Exports have been a bright spot for the Chinese economy this year, with the latest export data increasing by 12.7% y/y in October, reaching US$309 billion. The trade surplus jumped to US$96 billion, the third-highest monthly figure on record.

 

Notes About Companies in Model Portfolio

• Fortis (FTS) released its Q3 2024 results. Third quarter net earnings of $420 million or $0.85 per common share, up from $394 million or $0.81 per common share in 2023. The Board of Directors declared a 4.2% increase in the fourth quarter dividend that will mark 51 years of consecutive increases in dividends paid.

• Intact Financial (IFC) reported Q3-2024 results. Overall operating Direct Premiums Written (DPW) increased 4%, with organic growth of 6%, after excluding the net impact from acquisitions and exits. Net operating income attributable to common shareholders remained profitable at $182 million after absorbing $1,216 million of catastrophe losses in the quarter.

• Pembina Pipelines (PPL) reported results for Q3 2024. Quarterly earnings of $385 million, quarterly adjusted EBITDA of $1,019 million, and quarterly adjusted cash flow from operating activities of $724 million.

 

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