{"id":1444,"date":"2024-02-12T18:09:17","date_gmt":"2024-02-12T18:09:17","guid":{"rendered":"https:\/\/advisor.wellington-altus.ca\/wagner\/?p=1444"},"modified":"2024-02-12T18:09:17","modified_gmt":"2024-02-12T18:09:17","slug":"last-month-in-the-markets-american-indexes-reach-new-highs","status":"publish","type":"post","link":"https:\/\/advisor.wellington-altus.ca\/wagner\/2024\/02\/12\/last-month-in-the-markets-american-indexes-reach-new-highs\/","title":{"rendered":"Last Month In The Markets: American Indexes Reach New Highs"},"content":{"rendered":"<h2>Last Month in the Markets: January 2<sup>nd<\/sup> \u2013 31<sup>st<\/sup>, 2024<\/h2>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full wp-image-1448\" src=\"https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2024\/02\/last-month-in-the-markets.jpg\" alt=\"\" width=\"1132\" height=\"298\" srcset=\"https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2024\/02\/last-month-in-the-markets.jpg 1132w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2024\/02\/last-month-in-the-markets-300x79.jpg 300w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2024\/02\/last-month-in-the-markets-1024x270.jpg 1024w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2024\/02\/last-month-in-the-markets-768x202.jpg 768w\" sizes=\"(max-width: 1132px) 100vw, 1132px\" \/><\/p>\n<h2>What happened in January?<\/h2>\n<p>The year began with a small decline in the S&amp;P 500 in the first week of January, but after a strong U.S. jobs report, both the S&amp;P 500 and the Dow reached new all-time highs.\u00a0 Most, but not all, of the news propelled American indexes to new heights, and dragged Canadian stocks along.<\/p>\n<p>The annualized December Consumer Price Index for both Canada than the U.S. was at 3.4%, which is well below previous levels, but not low enough to cause the Bank of Canada or the Federal Reserve to lower rates.<\/p>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-1449\" src=\"https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2024\/02\/Equities-Jan-24.jpg\" alt=\"Equities Jan 24\" width=\"1068\" height=\"646\" srcset=\"https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2024\/02\/Equities-Jan-24.jpg 1068w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2024\/02\/Equities-Jan-24-300x181.jpg 300w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2024\/02\/Equities-Jan-24-1024x619.jpg 1024w, https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2024\/02\/Equities-Jan-24-768x465.jpg 768w\" sizes=\"(max-width: 1068px) 100vw, 1068px\" \/><\/p>\n<p>Many events contributed to the overall rise during the month for equity investors:<\/p>\n<p>1. <strong>January 5<sup>th<\/sup><\/strong><\/p>\n<p>U.S. nonfarm payroll employment increased 216,000 in December, exceeding analyst expectations.\u00a0 The unemployment rate of 3.7% was based on 6.3 million unemployed persons in December.\u00a0 One year ago, the unemployment rate was 3.5%, and the number of unemployed persons was 5.7 million.\u00a0 <a href=\"https:\/\/www.bls.gov\/news.release\/empsit.nr0.htm\">BLS release<\/a>\u00a0\u00a0 <a href=\"https:\/\/www.cnbc.com\/2024\/01\/05\/jobs-report-december-2023-payrolls-increased-by-216000-in-december.html\">CNBC<\/a><\/p>\n<p>The U.S. economy\u2019s resilience has raised questions whether the Federal Reserve will lower interest rates as quickly as anticipated.\u00a0 After adding an average of 225,000 per month over the past year, U.S. consumer demand and consumption may push inflation along.\u00a0 Strong jobs creation, typically, is good-news for equities in the short-term, but may not allow interest rates to fall further. <a href=\"https:\/\/www.dol.gov\/newsroom\/releases\/osec\/osec20240105\">U.S. Department of Labor<\/a><\/p>\n<p>2. <strong>January 11<sup>th<\/sup><\/strong><\/p>\n<p>The U.S. Bureau of Labor Statistics (BLS) released the Consumer Price Index (CPI) for December, and year-over-year inflation for calendar 2023.\u00a0 Consumer prices rose 0.3% in December, up from 0.1% in November.\u00a0 Over the past 12 months, the all-items index increased 3.4%, compared to 3.1% at the end of November.\u00a0 Over the past year the Core CPI decreased slightly to 3.9% from 4.0% at the end of November.\u00a0 <a href=\"https:\/\/www.bls.gov\/news.release\/cpi.nr0.htm\">BLS CPI release<\/a><\/p>\n<p>3. <strong>January 18<sup>th<\/sup><\/strong><\/p>\n<p>U.S. equities were assisted by a legislative advance, when the U.S. Congress approved another stop-gap spending bill to keep the federal government operating until the beginning of March.\u00a0 The upcoming schedules for the House and Senate almost certainly guarantee another threat to government operations leading up to March 1<sup>st<\/sup> and 8<sup>th<\/sup>. <a href=\"https:\/\/www.cbsnews.com\/news\/senate-government-shutdown-stopgap-bill\/#:~:text=Washington%20%E2%80%94%20Congress%20approved%20a%20stopgap,to%20108%20vote%20Thursday%20afternoon.\">CBS News<\/a><\/p>\n<p>4.<strong> January 19<sup>th<\/sup><\/strong><\/p>\n<p>After a short period of tempering related to U.S. employment and inflation data, the S&amp;P 500 set a new all-time closing high, and the Dow bested its previous record.\u00a0 This was the eleventh positive week for U.S. indexes out of the last twelve.\u00a0 This was not the only day that record highs were reached before a slight dip at the end of January.<\/p>\n<p>The Canadian Consumer Price Index (CPI) rose 3.4% on a year-over-year basis in December, after the same reading sat at 3.1% in November.\u00a0 Contributing to the annual inflation rate were increases for gasoline, fuel oil, airfares, passenger vehicles, rent and groceries.\u00a0 For the month the CPI fell 0.3% in December, after a 0.1% gain in November.\u00a0 Gasoline contributed to both the annual increase, and the monthly decline in consumer inflation.\u00a0 Gasoline prices fell for the fourth consecutive month but remain above the level of December 2022.<\/p>\n<p>The path of inflation will guide the Bank of Canada\u2019s interest rate announcements scheduled over the next few months.\u00a0\u00a0 <a href=\"https:\/\/www150.statcan.gc.ca\/n1\/daily-quotidien\/240116\/dq240116b-eng.htm\">CPI Annual Review<\/a> \u00a0\u00a0\u00a0<a href=\"https:\/\/www150.statcan.gc.ca\/n1\/daily-quotidien\/240116\/dq240116a-eng.htm?HPA=1\">StatsCan and CPI<\/a>\u00a0\u00a0\u00a0 <a href=\"https:\/\/www.cbc.ca\/news\/business\/inflation-dec-2023-1.7084981\">CBC and CPI<\/a> <a href=\"https:\/\/toronto.citynews.ca\/2024\/01\/16\/inflation-canada-cpi-december-report\/\">CityNews<\/a><\/p>\n<p>5. <strong>January 24<sup>th<\/sup><\/strong><\/p>\n<p>The Bank of Canada held its <a href=\"https:\/\/www.bankofcanada.ca\/2022\/04\/understanding-policy-interest-rate\/\">policy interest rate<\/a>, the overnight rate, steady at 5%, the Bank Rate at 5\u00bc% and the deposit rate at 5% and continued its program of quantitative tightening.\u00a0 <em>\u201c<\/em><em>Global economic growth continues to slow, with inflation easing gradually across most economies. While growth in the United States has been stronger than expected, it is anticipated to slow in 2024, with weakening consumer spending and business investment.\u201d<\/em><em> \u201c<\/em><em>Governing Council wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.\u201d<\/em>\u00a0\u00a0\u00a0\u00a0 <a href=\"https:\/\/www.bankofcanada.ca\/2024\/01\/fad-press-release-2024-01-24\/\">BoC release and MPR<\/a><\/p>\n<p>6. <strong>January 25<sup>th<\/sup><\/strong><\/p>\n<p>Based on Gross Domestic Product (GDP) growth, the American economy grew faster than expected for the quarter and the year, and inflation cooled for December and 2023, according to the Bureau of Economic Analysis.\u00a0 In the fourth quarter GDP increased at a 3.3% annualized rate, and real GDP for the entire year of 2023 grew 2.5%.\u00a0 The higher growth for both the quarter and year are linked to strong consumer and government spending.<\/p>\n<p>The Personal Consumption and Expenditure price index (PCE), which is the Federal Reserve\u2019s primary inflation measurement, rose 0.2% in December and 2.6% for 2023.\u00a0 The annualized rate of inflation is approaching the Fed\u2019s low-term average goal of 2%, which would require inflation to fall under 2% to average-out the extended periods of high inflation that have been experienced.<\/p>\n<p>Higher than expected growth is defying the logic of many economists that had predicted that the U.S. would experience a shallow recession as a by-product of rising interest rates enacted to combat inflation. <a href=\"https:\/\/www.bea.gov\/sites\/default\/files\/2024-01\/gdp4q23-adv.pdf\">BEA GDP release<\/a>\u00a0\u00a0\u00a0 <a href=\"https:\/\/www.cnbc.com\/2024\/01\/25\/gdp-q4-2023-the-us-economy-grew-at-a-3point3percent-pace-in-the-fourth-quarter.html\">CNBC and GDP<\/a>\u00a0\u00a0\u00a0 <a href=\"https:\/\/www.bea.gov\/news\/2024\/personal-income-and-outlays-december-2023\">BEA PCE release<\/a>\u00a0\u00a0\u00a0 <a href=\"https:\/\/www.cnbc.com\/2024\/01\/26\/pce-inflation-december-2023-.html\">CNBC and PCE<\/a><\/p>\n<p>7. <strong>January 31<sup>st<\/sup><\/strong><\/p>\n<p>On the last afternoon of the month the Federal Reserve released its monetary policy update.\u00a0 Interest rates were held steady by the Fed, and the course of quantitative tightening continues, which matched market and analyst expectations.\u00a0\u00a0 The next Fed interest rate announcement is scheduled for March 20<sup>th<\/sup>, and as of February 1<sup>st<\/sup> the likelihood of an interest rate cut is 46%.<\/p>\n<p>In one of their shortest written statements, the Fed communicated <em>\u201c<\/em><em>Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have moderated since early last year but remain strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated.<\/em><em>\u201d\u00a0 <\/em>The statement suggests that the Federal Reserve\u2019s interest rate committee, the FOMC, believes that the U.S. economy is performing well enough that it does not need monetary policy stimulus at this time, and that such stimulus could add to the higher than desired rate of inflation.\u00a0 <a href=\"https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html?redirect=\/trading\/interest-rates\/countdown-to-fomc.html\">CME FedWatch<\/a>\u00a0\u00a0 <a href=\"https:\/\/www.federalreserve.gov\/monetarypolicy\/fomcpresconf20240131.htm\">Fed release and presser<\/a><\/p>\n<h2>What\u2019s ahead for February and beyond?<\/h2>\n<p>January concluded with a Federal Reserve interest rate announcement, just a week after a Bank of Canada update.\u00a0 As news of the fight against inflation continues to drone on, the path of interest rates will drive markets throughout 2024.\u00a0 Once central banks in North America begin to lower rates, as they are expected to do in 2024, the static string of boring updates will gather more excitement, and likely have a greater effect on the markets, depending on the element of surprise.<\/p>\n<p>The other indicator affecting monetary policy is employment.\u00a0 Employment growth has slowed in Canada, as new job creation has ceased as of the last announcement, and immigration effects and labour market participation have driven the unemployment rate higher.\u00a0 In the U.S. the jobs market is still strong.<\/p>\n<p>Both the timing of the announcements and the economic realities for inflation and jobs have some analysts believing that the Bank of Canada could lower rates before the Fed does.\u00a0 It is not a certainty for either March or April, but consensus is growing that by June Canadian rates could begin to come down.\u00a0 <a href=\"https:\/\/www.cbc.ca\/news\/business\/bank-of-canada-interest-rate-january-1.7093055\">CBC and BoC rates<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Last Month in the Markets: January 2nd \u2013 31st, 2024 What happened in January? The year began with a small decline in the S&amp;P 500 in the first week of January, but after a strong U.S. jobs report, both the S&amp;P 500 and the Dow reached new all-time highs.\u00a0 Most, but not all, of the [&hellip;]<\/p>\n","protected":false},"author":193,"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-1444","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: American Indexes Reach New Highs - 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\/2024\/02\/12\/last-month-in-the-markets-american-indexes-reach-new-highs\/\" \/>\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: American Indexes Reach New Highs - Wagner Investment Management Team\" \/>\n<meta property=\"og:description\" content=\"Last Month in the Markets: January 2nd \u2013 31st, 2024 What happened in January? The year began with a small decline in the S&amp;P 500 in the first week of January, but after a strong U.S. jobs report, both the S&amp;P 500 and the Dow reached new all-time highs.\u00a0 Most, but not all, of the [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/advisor.wellington-altus.ca\/wagner\/2024\/02\/12\/last-month-in-the-markets-american-indexes-reach-new-highs\/\" \/>\n<meta property=\"og:site_name\" content=\"Wagner Investment Management Team\" \/>\n<meta property=\"article:published_time\" content=\"2024-02-12T18:09:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2024\/02\/last-month-in-the-markets.jpg\" \/>\n<meta name=\"author\" content=\"Akeem Foster\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Akeem Foster\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/advisor.wellington-altus.ca\\\/wagner\\\/2024\\\/02\\\/12\\\/last-month-in-the-markets-american-indexes-reach-new-highs\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/advisor.wellington-altus.ca\\\/wagner\\\/2024\\\/02\\\/12\\\/last-month-in-the-markets-american-indexes-reach-new-highs\\\/\"},\"author\":{\"name\":\"Akeem Foster\",\"@id\":\"https:\\\/\\\/advisor.wellington-altus.ca\\\/wagner\\\/#\\\/schema\\\/person\\\/9dbe4b50cefc6edb144c66059957fbf1\"},\"headline\":\"Last Month In The Markets: American Indexes Reach New Highs\",\"datePublished\":\"2024-02-12T18:09:17+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/advisor.wellington-altus.ca\\\/wagner\\\/2024\\\/02\\\/12\\\/last-month-in-the-markets-american-indexes-reach-new-highs\\\/\"},\"wordCount\":1180,\"publisher\":{\"@id\":\"https:\\\/\\\/advisor.wellington-altus.ca\\\/wagner\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/advisor.wellington-altus.ca\\\/wagner\\\/2024\\\/02\\\/12\\\/last-month-in-the-markets-american-indexes-reach-new-highs\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/advisor.wellington-altus.ca\\\/wagner\\\/wp-content\\\/uploads\\\/sites\\\/95\\\/2024\\\/02\\\/last-month-in-the-markets.jpg\",\"articleSection\":[\"Market Insights\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/advisor.wellington-altus.ca\\\/wagner\\\/2024\\\/02\\\/12\\\/last-month-in-the-markets-american-indexes-reach-new-highs\\\/\",\"url\":\"https:\\\/\\\/advisor.wellington-altus.ca\\\/wagner\\\/2024\\\/02\\\/12\\\/last-month-in-the-markets-american-indexes-reach-new-highs\\\/\",\"name\":\"Last Month In The Markets: American Indexes Reach New Highs - 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