{"id":1270,"date":"2023-09-12T19:49:54","date_gmt":"2023-09-12T19:49:54","guid":{"rendered":"https:\/\/advisor.wellington-altus.ca\/wagner\/?p=1270"},"modified":"2023-09-13T13:17:44","modified_gmt":"2023-09-13T13:17:44","slug":"last-month-in-the-markets-north-american-equities-trim-gains","status":"publish","type":"post","link":"https:\/\/advisor.wellington-altus.ca\/wagner\/2023\/09\/12\/last-month-in-the-markets-north-american-equities-trim-gains\/","title":{"rendered":"Last Month In the Markets \u2013 North American Equities Trim Gains"},"content":{"rendered":"<h5 style=\"line-height: normal; margin: 1.75pt 0cm 1.0pt 6.0pt;\"><span lang=\"EN-US\">Last Month in the Markets \u2013 August 1 &#8211; 31, 2023<\/span><\/h5>\n<p><a href=\"https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Markets-\u2013-August-1-31.png\"><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone wp-image-1273 size-full\" src=\"https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Markets-\u2013-August-1-31.png\" alt=\"Markets \u2013 August 1 - 31\" width=\"2163\" height=\"685\" srcset=\"https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Markets-\u2013-August-1-31.png 2163w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Markets-\u2013-August-1-31-300x95.png 300w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Markets-\u2013-August-1-31-1024x324.png 1024w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Markets-\u2013-August-1-31-768x243.png 768w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Markets-\u2013-August-1-31-1536x486.png 1536w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Markets-\u2013-August-1-31-2048x649.png 2048w\" sizes=\"(max-width: 2163px) 100vw, 2163px\" \/><\/a><\/p>\n<p class=\"p2\"><span style=\"font-size: 10pt;\"><span class=\"s1\"><span class=\"Apple-converted-space\">\u00a0<\/span><\/span><span class=\"s2\">(source: Bloomberg <\/span><a href=\"https:\/\/www.bloomberg.com\/markets\" target=\"_blank\" rel=\"noopener\">https:\/\/www.bloomberg.com\/markets<\/a><span class=\"s2\">, MSCI <\/span><a href=\"https:\/\/www.msci.com\/end-of-day-data-search\" target=\"_blank\" rel=\"noopener\">https:\/\/www.msci.com\/end-of-day-data-search<\/a> <span class=\"s2\">and ARG Inc. analysis)<span class=\"Apple-converted-space\">\u00a0<\/span><\/span><\/span><\/p>\n<h5><span lang=\"EN-US\" style=\"color: #202020;\">What happened in August?<\/span><\/h5>\n<p>On a monthly basis North American equity indexes did not perform well, losing about 2%, and trimming year-to-date performance for the TSX Composite and Dow Jones to less than 5%. The Dow\u2019s 1-year return at just over 10% has more than doubled the TSX, which sits below 5%. Year-to-date, the S&amp;P 500 and NASDAQ have done well at 17.4% and 34.1%, respectively, and 14.0% and 18.8% year-over-year.<\/p>\n<p><img decoding=\"async\" class=\"alignnone wp-image-1272 size-full\" src=\"https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Equities-August-2023-.jpg\" alt=\"\" width=\"1583\" height=\"922\" srcset=\"https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Equities-August-2023-.jpg 1583w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Equities-August-2023--300x175.jpg 300w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Equities-August-2023--1024x596.jpg 1024w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Equities-August-2023--768x447.jpg 768w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2023\/09\/Equities-August-2023--1536x895.jpg 1536w\" sizes=\"(max-width: 1583px) 100vw, 1583px\" \/><span style=\"font-size: 10pt;\">(source: Bloomberg <a href=\"https:\/\/www.bloomberg.com\/markets\">https:\/\/www.bloomberg.com\/marketsa<\/a>nd ARG Inc. analysis)<\/span><\/p>\n<p>Like last month, August ended strongly, with a final week that delivered gains of 1.5% to 3.5% for the major indexes. However, the third week\u2019s performance could not be reversed before September began.<\/p>\n<ol>\n<li>August 1<sup>st<\/sup><\/li>\n<\/ol>\n<p>Fitch Ratings downgraded the quality of U.S. sovereign debt from \u201cAAA\u201d to \u201cAA+\u201d reflecting \u201cthe expected fiscal deterioration over the next three years, a high and growing general government (GG) debt burden, and the erosion of governance relative to . . . peers . . . that has manifested in repeated debt limit standoffs and last-minute resolutions.<\/p>\n<p>The government debt issue is driven by weaker federal government revenue, new spending initiatives and higher interest rates as the general government deficit is predicted to rise to 6.9% of gross domestic product in 2025 while the GG debt-to-GDP ratio is forecasted to rise to 118.4% by 2025. <a href=\"https:\/\/www.cbc.ca\/news\/business\/stock-markets-fitch-rating-downgrade-1.6925428\">CBC and Fitch<\/a> <a href=\"https:\/\/www.fitchratings.com\/research\/sovereigns\/fitch-downgrades-united-states-long-term-ratings-to-aa-from-aaa-outlook-stable-01-08-2023\">Press Release from Fitch<\/a><\/p>\n<ol>\n<li>August 4<\/li>\n<\/ol>\n<p>U.S. Employment situation summary and the Canadian Labour Force Survey were both released. Markets treated this data with wariness since the continued resiliency of the American job market fed into growing concern that interest rates would remain at current levels. In the U.S., non-farm payroll employment rose by 187,000 jobs in July, and the unemployment rate was unchanged at 3.5% as 5.8 million Americans are unemployed. Employment in Canada was static in July with 6,000 less jobs, which represents a change of less than one-tenth of one percent. The unemployment rate rose 0.1% to 5.5%, the third consecutive monthly increase. \u00a0<a href=\"https:\/\/www150.statcan.gc.ca\/n1\/daily-quotidien\/230804\/dq230804a-eng.htm?HPA=1\">StatsCan July Job<\/a><u>s <\/u><a href=\"https:\/\/www.bls.gov\/news.release\/empsit.nr0.htm\">BLS July Jobs<\/a>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <a href=\"https:\/\/www.nytimes.com\/2023\/08\/04\/business\/economy\/jobs-report-july-2023.html\">NYTimes<\/a> <a href=\"https:\/\/www.nytimes.com\/2023\/08\/04\/business\/economy\/jobs-report-july-2023.html\">Jobs<\/a><\/p>\n<ol start=\"2\">\n<li>August 14 and 16<\/li>\n<\/ol>\n<p>Economic indicators from China, the world\u2019s second largest economy with significant international trade, began to turn downward. China\u2019s economic recovery and growth are slowing. The economic integration by Canada and the<\/p>\n<p>U.S. differs in magnitude and by overall trade balance, and \u201cbad news from China\u201d has affected different stocks and sectors differently in North America, but overall, both sides of the border have been impacted. <a href=\"https:\/\/www.visualcapitalist.com\/cp\/china-trade-partners\/\">China Trading Partners<\/a> <a href=\"https:\/\/www.nytimes.com\/2023\/09\/04\/business\/china-country-garden-debt-crisis.html\">China&#8217;s economic woes<\/a><\/p>\n<p>The U,S. Federal Reserve released its meeting minutes on the 16<sup>th<\/sup> from the July interest rate decision. The participants noted that \u201crecent indicators suggest the economic activity has been expanding at a moderate pace. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated.\u201d The committee voted unanimously to keep rates steady, while \u201cprepared to adjust the stance of monetary policy as appropriate.\u201d <a href=\"https:\/\/www.federalreserve.gov\/monetarypolicy\/files\/fomcminutes20230726.pdf\">Fed Minutes<\/a><\/p>\n<ol start=\"3\">\n<li>August 25<\/li>\n<\/ol>\n<p>On August 25<sup>th<\/sup>, Fed Chair, Jerome Powell, spoke about \u201cInflation and the Path Ahead.\u201d According to Powell inflation is still running too high and further interest rate increases may be required. Over the past year, \u201crestrictive monetary policy has tightened financial conditions, supporting the expectation of below-trend growth.\u201d Despite these comments equity markets moved higher on the last day of the week, especially the Dow. <a href=\"https:\/\/www.federalreserve.gov\/newsevents\/speech\/powell20230825a.htm\">Read Powell&#8217;s speech <\/a><a href=\"https:\/\/www.youtube.com\/live\/Y-1SowXR8zY?si=YW36zLVCycwovric\">Watch<\/a> <a href=\"https:\/\/www.youtube.com\/live\/Y-1SowXR8zY?si=YW36zLVCycwovric\">Powell&#8217;s speech<\/a> <a href=\"https:\/\/www.cnbc.com\/2023\/08\/25\/fed-chair-powell-calls-inflation-too-high-and-warns-that-we-are-prepared-to-raise-rates-further.html\">CNBC summary<\/a><\/p>\n<ol start=\"4\">\n<li>August 31<\/li>\n<\/ol>\n<p>The month concluded on a highnote when Atlanta Federal Reserve Bank President Raphael Bostic indicated that \u201cpolicy is appropriately restrictive\u201d during a speech in Cape Town, South Africa. Although he did not indicate that it was time to ease monetary policy, he stated patience is needed to allow the current restrictive policy to influence the economy and not inflict unnecessary economic pain.\u201d The Fed is expected to leave rates unchanged at its next meeting. <a href=\"https:\/\/www.cnbc.com\/2023\/08\/31\/feds-bostic-says-us-interest-rates-are-high-enough.html\">CNBC and Bostic<\/a><\/p>\n<h5>What\u2019s ahead for September and beyond in 2023?<\/h5>\n<p>The Federal Reserve\u2019s next interest rate announcement is scheduled for September 20. Eight weeks will have passed since their last interest rate decision, in which time the U.S. will have released two rounds of consumer inflation and employment reports.<\/p>\n<p>The deliberations at the Bank of Canada show that concern over raising rates too quickly and too far are important concerns for members of the rate-setting committee. <a href=\"https:\/\/www.cbc.ca\/news\/business\/bank-of-canada-deliberations-1.6919589\">https:\/\/www.cbc.ca\/news\/business\/bank-of-canada-deliberations-1.6919589<\/a><\/p>\n<p>&nbsp;<\/p>\n<p><strong><em>Wagner Investment Management Team contributors: Susyn Wagner &amp; Karen Routledge<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Federal Reserve\u2019s next interest rate announcement is scheduled for September 20. Eight weeks will have passed since their last interest rate decision, in which time the U.S. will have released two rounds of consumer inflation and employment reports.<\/p>\n","protected":false},"author":155,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_oasis_is_in_workflow":0,"_oasis_original":0,"_oasis_task_priority":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[15],"tags":[],"class_list":["post-1270","post","type-post","status-publish","format-standard","hentry","category-market-insights"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Last Month In the Markets \u2013 North American Equities Trim Gains - Wagner Investment Management Team<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/advisor.wellington-altus.ca\/wagner\/2023\/09\/12\/last-month-in-the-markets-north-american-equities-trim-gains\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Last Month In the Markets \u2013 North American Equities Trim Gains - Wagner Investment Management Team\" \/>\n<meta property=\"og:description\" content=\"The Federal Reserve\u2019s next interest rate announcement is scheduled for September 20. 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