Last year was productive for equity investors, with Canadian and American indexes delivering strong returns for the third consecutive year. However, it wasn’t without turbulence. The first quarter saw modest gains until a major policy announcement in early April introduced a new round of trade tariffs, sparking a global trade conflict.

By Friday, April 4, the North American equity indexes had plunged between 6.32 per cent and 10.02 per cent for the week. The MSCI All Country World Index fell 7.91 per cent over the same period, signifying the depth and breadth of the negative effects of tariffs on equity values around the world. Fortunately, by mid-May the TSX, S&P 500, Dow and NASDAQ had recovered these early losses.

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The final, and Thanksgiving shortened, week of the month salvaged what had been a dismal period for North American equity indexes. The S&P 500 and Dow eked out small gains but gains nonetheless after rising more than 3 percent last week. The TSX rose 4 percent in the last week and achieved another all-time high. In the four trading days last week, NASDAQ jumped nearly 5 percent but remained 1½ percent below its level from the end of October.

North American equity investors saw strong performance, especially those focused on the U.S. indexes.  Although the TSX moved up nearly one per cent, the American indexes moved up substantially more, with the NASDAQ delivering nearly five per cent. 

This performance came with an increase of uncertainty and volatility that spiked in the middle of the month.  Further evidence of the resultant flight-to-safety was the peak closing price for gold on October 20, when it reached $4,359 USD. 

Investors focused on equities and enjoyed spectacular performance over the last three months, including last month. From an economic news perspective, it was a relatively calm month. Conditions that had been in place continued their paths as indicators held their trajectory. Employment remained soft, inflation ticked upward, and central banks cut rates as a result.