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 Q1 2025 edition covers Market Review for 2024, a discussion about the main themes for 2025, and some long-term multi-decade trends. Shiuman’s Corner is a list of books I read last year.
Markets
Market scorecard as of close on Friday January 17, 2025.
| Country | Equity Indices | Level | 1 week | YTD |
| Canada | S&P/TSX Composite | 25,068 | 1.2% | 1.4% |
| U.S. | S&P 500 | 5,997 | 2.9% | 2.0% |
| U.S. | NASDAQ | 19,607 | 2.3% | 1.5% |
| Europe/Asia | MSCI EAFE | 2,289 | 0.8% | 1.2% |
Source: FactSet
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TSX closed higher in Friday afternoon trading, near best levels. All sectors higher. Canadian equities rose 1.2% for the week.
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US equities were higher in Friday trading, though ended a bit off best levels. Friday’s rally capped off a week of healthy gains across the major averages. Equal-weight S&P 500 a relative underperformer today on big tech leadership, but outpaced cap-weighted index by over 100 bp for the week.
Economy
Canada
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Canada’s labour market ended 2024 on a strong note. December’s employment data showed a gain of 91,000 jobs, well above consensus expectations of 25,000 and matching the fastest pace of hiring in the past two years.
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For the BoC, a single positive jobs report is likely not enough to trigger a pause in rate cuts, although markets will be watching labour and inflation data closely for potential insights into the central bank’s policy rate decisions as policymakers pursue a data-dependent approach to monetary easing.
U.S.
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Recent economic data presented a relatively benign view of the U.S. economy. The December nonfarm payroll report showed the U.S. created 256,000 jobs last month, while unemployment dropped to 4.1%.
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The robust labor performance came alongside relatively benign inflation data, with the Consumer Price Index (CPI) rising 2.9% y/y in December. We think the combination of strong labor markets and above-target inflation is likely to keep the Fed on hold at its January policy meeting.
Further Afield
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Markets are pricing in an 86% probability of a January interest rate hike by the Bank of Japan (BoJ) at its next meeting, up from 58% last Friday. BoJ Governor Kazuo Ueda and Deputy Governor Ryozo Himino said earlier this week that they will decide if a hike is warranted at the bank’s January meeting.
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The Bank of Korea (BoK) unexpectedly held its interest rates unchanged as it weighs the impact of a weakening won against a backdrop of political instability and a slowing economy.
Notes About Companies in Model Portfolio
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UnitedHealth Group (UNH) reported full year and fourth quarter 2024 results last Thursday. 2024 revenues grew $28.7 billion or 8% year-over-year to $400.3 billion.
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