Reflections & Resources

Last Month in Markets – Record Highs and Rate Cuts – October 2024

Last Month in the Markets: October 1 – 31, 2024

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened in October?

Record highs were set again for the S&P/TSX Composite, S&P 500 and Dow Jones Industrial Average, and the NASDAQ almost achieved the same feat, falling just short of its highest-ever level. Gold continued its winning-ways and rose to its highest price of all-time, ending the month almost 4 per cent higher, and 33 per cent more than its price at the beginning of 2024. before falling again and by the end of the month it was below its 2024 starting price and significantly below the level from one year ago. Bond yields rose more than 250 basis points.

(source: Bloomberg https://www.bloomberg.com/marketsand ARG Inc. analysis)

The notable events included:

  1. October 4

The U.S. Bureau of Labor Statistics (BLS) released September’s nonfarm payroll report showing that 254,000 jobs were added, much higher than the 159,000 in August. In September, 6.3 people were unemployed. The unemployment rate in September was essentially unchanged at 4.1 per cent compared with 4.2 per cent in August.

CNBC and nonfarm payrolls. BLS Employment Situation Report: September 2024  

  1. October 9

The U.S. Federal Reserve (the Fed) released the meeting minutes from their last Federal Open Market Committee (FOMC) interest rate decision on September 18. Committee members were divided between a 0.25 and 0.5 reduction, with the larger cut ultimately carrying the vote, 11-1. Recent jobs data suggests that a more gradual approach may have been appropriate.  FOMC minutes  CNBC and FOMC

  1. October 10

According to the BLS, the Consumer Price Index rose 0.2 per cent for the month in September. On a year-over-year basis, prices have risen 2.4 per cent, down slightly from August’s annualized reading of 2.5 per cent. In September, the index for shelter rose 0.2 per cent, and food increased 0.4 per cent.     BLS CPI release   CNBC and CPI

  1. October 11

According to Statistics Canada’s (StatsCan) Labour Force Survey for September, employment rose by 47,000 and the unemployment rate fell 0.1 per centage points to 6.5 per cent. Full-time employment saw the largest monthly increase since May 2022. Gains were made by youth and core-aged women. The information, culture, and recreation (+22,000), wholesale and retail trade (+22,000) and professional, scientific and technical services (+21,000) sectors added the most employees. The consensus remains that the condition of the economy continues to encourage the Bank of Canada (BoC) to continue cutting rates.  StatsCan release  CBC and jobs

  1. October 15

StatsCan announced the Consumer Price Index rose 1.6 per cent on a year-over-year basis in September, down from 2.0 per cent in August. It was the smallest yearly increase since February 2021. Gasoline fell by more than 10 per cent in September and was the major contributor to inflation’s deceleration. The price of groceries rose 2.4 per cent in September, the same growth rate as August.  StatsCan CPI release  CBC and CPI

  1. October 23

The BoC cut its policy rate another 0.5 per cent (50 basis points). After three 0.25 point cuts and this 0.5 point cut, the overnight rate has been lowered to 3.75 per cent from its peak of 5 per cent. The rate cuts have contributed to the lowering of year-over-year inflation, which sits at 1.6 per cent according to the recent StatsCan release.

The BoC also released its quarterly Monetary Policy Report outlining its rationale behind its rate cut and expectations for the economy, employment and inflation.  BoC rate announcement    Monetary Policy Report   CBC and BoC rate cut

  1. October 31

The U.S. Personal Consumption Expenditures (PCE) price index rose 2.1 per cent on a year-over-year basis in September, down from 2.3 per cent in August. Core PCE, which excludes food and energy, was up 2.7 per cent year-over-year, maintaining the same level for the past three months.  BEA PCE release  CNBC and PCE

What’s ahead for November and beyond?

November began with the release of October’s U.S. nonfarm payroll report. Employment was essentially unchanged (+12,000), and the unemployment rate remained at 4.1 per cent. The Dow Jones had predicted 100,000 jobs. The number of unemployed was little changed at 7.0 million. The two hurricanes in the Gulf of Mexico and the Boeing strike contributed to the slower than expected jobs growth. Employment increased in health care and government and declined in temporary help services and manufacturing.

Equity markets reacted positively to begin the month with all major North American indexes posting positive gains. Financial markets are predicting a rate cut of 0.25 per cent at the next two U.S. Federal Reserve announcements this year according to CME Group’s FedWatch tool. The next interest rate decision will be announced on November 6.   BLS release   CNBC and jobs

 

 

 

 

 

 

 

 

 

Recent Posts

Last Month in Markets – Record Highs and Rate Cuts – October 2024

Last Month in the Markets: October 1 – 31, 2024
What happened in October?
Record highs were set again for the S&P/TSX Composite, S&P 500 and Dow Jones Industrial Average, and the NASDAQ almost achieved the same feat, falling just short of its highest-ever level. Gold continued its winning-ways and rose to its highest price of all-time, ending the month almost 4 per cent higher, and 33 per cent more than its price at the beginning of 2024. Oil rose nearly 4 per cent in the first week before falling again and by the end of the month it was below its 2024 starting price and significantly below the level from one year ago. Bond yields rose more than 250 basis points.

Read More »

Riding the Waves: Understanding and Navigating Market Fluctuations

This summer’s market behaviour has been quite the ride. If you weren’t closely monitoring your portfolio, you might have missed some of the action. But for those of us paying attention, the global equity markets were anything but dull. By July 31, many of our clients’ equity holdings had hit their highest points of the year, only to sharply dip shortly afterward.

Read More »

The information contained herein has been provided for information purposes only. The information has been drawn from sources believed to be reliable. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Wellington-Altus Private Wealth Inc. (WAPW) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPW assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Before acting on any of the above, please contact your financial advisor.

© 2024, Wellington-Altus Private Wealth Inc. ALL RIGHTS RESERVED. NO USE OR REPRODUCTION WITHOUT PERMISSION. www.wellington-altus.ca