Monthly highlights of major events which drive financial markets, along with perspectives on what they mean and why they matter.
November in review
Stocks and bonds posed an impressive rebound in November, helping to offset declines in October as U.S. election results and strong macroeconomic data buoyed investor sentiment. Canadian equities gained 6.38%, bolstered by strong performances in the Information Technology (28.29%), Financials (7.54%), and Consumer Discretionary (7.36%) sectors. Coinciding with the rise in Canadian equities, U.S. equities advanced 5.87%, primarily due to strength in Consumer Discretionary (13.34%), Financials (10.28%), and Industrials (7.51%) sectors. Canadian and U.S. bonds rose by 1.68% and 1.06%, respectively, as the central banks of both countries continued to cut interest rates. Commodities were mixed for the month: gold and oil fell by 3.35% and 1.18%, respectively, while the price of natural gas increased 13.31%, driven by forecasts of colder than normal temperatures this winter season. Escalating geopolitical concerns and risk of trade wars contributed to weaker emerging market equities, which finished the month down 3.58% as investors remained cautious.
Here are some of November's most notable events:
Canada’s GDP growth slows in Q3. In the third quarter of 2024, Canada’s economy expanded at an annualized rate of 1.0%, falling just short of the anticipated 1.1% and marking the slowest growth in three quarters, following a stronger 2.2% increase in Q2. Household spending played a key role in supporting growth, buoyed by improved financial conditions that encouraged consumer activity. However, this was offset by contractions in business investment and net exports, which dragged on overall economic performance. The lackluster growth may lead the Bank of Canada to consider another interest rate cut in December, as policymakers seek to bolster economic momentum amid persistent headwinds.
U.S. Federal Reserve (Fed) eases rates further amid cooling inflation and slowing labor market. In November, the Federal Reserve lowered its federal funds rate by 25 basis points, following a 50-basis-point reduction in September, setting the target range at 4.50%-4.75%. This decision underscores the Fed’s efforts to support economic stability as inflation continues to move closer to its 2% target and the labor market shows signs of slowing. Consumer inflation expectations for the next year dropped to 2.9%, the lowest level since early 2020, reflecting improved sentiment. Markets widely expect another rate cut in December as the Fed carefully evaluates ongoing economic and financial developments.
| Index† | Change (%) | Index Level | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Treasury Bill (FTSE Canada 60 Day T-Bill) | 0.30 | 4.47 | 5.31 | 185.13 |
| Canadian Bonds (FTSE Canada Universe Bond) | 1.68 | 4.95 | 13.21 | 1,177.01 |
| Canadian Equities (S&P/TSX Composite) | 6.38 | 25.77 | 40.48 | 25,648.00 |
| U.S. Bonds (Barclays U.S. Aggregated Bond, US$) | 1.06 | 2.93 | 11.71 | 2,225.45 |
| U.S. Equities (S&P 500, US$) | 5.87 | 28.06 | 46.09 | 6,032.38 |
| Global Equities (MSCI World, US$) | 4.62 | 22.37 | 40.53 | 3,810.14 |
| Emerging Marketings (MSCI Emerging Markets, US$) | -3.58 | 8.10 | 21.37 | 1,078.57 |
| Currencies† | Change (%) | Exchange Rate | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| C$/US ($) | -0.52 | -5.44 | -0.93 | 0.7140 |
| C$/Euro (€) | 2.37 | -1.27 | -0.95 | 0.6751 |
| C$/Pound (£) | 0.75 | -5.43 | -5.50 | 0.5606 |
| C$/Yen (¥) | -1.99 | 0.59 | -2.17 | 106.953 |
| Commodities (US$)† | Change (%) | Price | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Gold Spot ($/oz) | -3.35 | 23.25 | 25.98 | 2,681.00 |
| Oil WTI ($/barrel) | -1.18 | -2.77 | -9.69 | 68.00 |
| Natural Gas ($/MMBtu) | 13.31 | -11.50 | -27.07 | 3.36 |
†Total Return, as at November 30, 2024. Indices are quoted in their local currency.
Source: Bloomberg
Indices are not managed, and it is not possible to invest directly in an index.
Markets respond to Trump’s re-election. In November, Republican Donald Trump secured a second term as U.S. President, alongside a Republican sweep of Congress. Markets reacted positively to the announcement and Trump’s promises of pro-business initiatives, with major U.S. stock indices climbing to new record highs. Expectations of tax cuts, deregulation, and increased infrastructure spending boosted investor sentiment. However, uncertainty surrounding potential changes to foreign policy and trade agreements added caution to market optimism. The Republican control of both the legislative and executive branches of government is expected to accelerate policy implementation, leaving investors closely watching developments that could shape economic and market performance moving forward.
Did you know?
On November 8, 2024, Nvidia was added to the Dow Jones Industrial Average (DJIA), replacing Intel after its 25-year tenure. This shift reflects the evolving dynamics of the semiconductor industry and the increasing importance of advanced technologies such as artificial intelligence. As a price-weighted index, the DJIA emphasizes companies with higher stock prices, highlighting Nvidia’s strong performance and leadership in innovation.
