![\"Last](\"https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2024\/03\/Last-Month-in-the-Markets.png\")
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It was another strong month for equity investors focused on North America.\u00a0 Canada\u2019s S&P\/TSX Composite Index rose over 1.5%, the Dow Jones Industrial Average was up more than 2%, the S&P 500 ballooned by 5.2%, and the NASDAQ Composite jumped 6.1%.\u00a0 The S&P 500 reached new record high levels eight times in February.<\/p>\n
Over the past year, U.S. indexes have grown roughly 20%, 30% and 40% for the Dow, S&P 500, and NASDAQ, respectively.\u00a0 The composition of the three indexes, 30 large corporations<\/a> for the Dow, 500 diversified companies<\/a> of the S&P 500, or more than 3,000 firms<\/a> of the NASDAQ with a 55% concentration in technology, deliver different results.\u00a0 The 225 Canadian companies<\/a> of the TSX have risen 5.7%\u00a0 since the end of February 2023.<\/p>\n In addition to company performance, several announcements and events contributed to the overall rise in equity values over the month:<\/p>\n Events on the last day of January created a positive environment to begin February.\u00a0 The U.S. Federal Reserve held its benchmark interest rate, the federal funds rate, steady.\u00a0 At the press conference on January 31, Federal Reserve Chair Jerome Powell said, \u201cI don\u2019t think it\u2019s likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to do that (lower rates).\u201d\u00a0 Although this was not necessarily positive news, it was aligned with market expectations, and the neutral position set the foundation for February\u2019s rise for equities.\u00a0 Fed release<\/a>\u00a0 CNBC and rates<\/a><\/p>\n Additionally, Canadian Gross Domestic Product (GDP) grew by 0.2% in November after three months of static performance.\u00a0 Goods-producing industries grew faster than the services sectors as 13 of 20 industrial sectors increased in November.\u00a0 The slight expansion in economic growth was welcome news for investors because modest growth supports the economy and easing of monetary policy.\u00a0 StatsCan release<\/a>\u00a0 StatsCan and GDP<\/a><\/p>\n The U.S. economy\u2019s ability to add jobs has proven to be remarkably resilient.\u00a0 Total non-farm payroll employment rose by 353,000 in January, the largest monthly increase since January 2023.\u00a0 Lower job creation would support the Federal Reserve lowering interest rates, but on its own merits, the robust employment situation is positive for the economy.\u00a0 BLS release<\/a>\u00a0\u00a0 CNBC and jobs<\/a><\/p>\n The S&P 500 breached and closed over 5,000 points for the first time in its history.\u00a0 After closing over 4,000 points in April 2021, it took nearly three years to reach the next millennium.\u00a0 Much of the U.S. gains can be attributed to the growing sentiment that the Federal Reserve may have achieved a soft landing<\/a> of slowing growth and inflation, but not placing the economy into a recession.<\/p>\n StatsCan released the latest data for the Canadian employment situation.\u00a0 January\u2019s Labour Force Survey showed that employment increased by 37,000 after three months of little change.\u00a0 The unemployment rate fell 0.1% to 5.7%, the first decline in more than one year.\u00a0 The employment rate declined by 0.1% to 61.6% as population grew slightly faster than employment.\u00a0 A CIBC senior economist suggested that the Bank of Canada \u201cwon\u2019t be in a rush to cut interest rates, and we maintain our expectation for a first [interest rate cut] in June\u201d, which had been a growing expectation.\u00a0 StatsCan release<\/a>\u00a0\u00a0 CBC and LFS<\/a><\/p>\n According to the Bureau of Labor Statistics, U.S. inflation is more persistent than expected.\u00a0 Continuing inflation above target is lessening the likelihood of a Federal Reserve rate cut.\u00a0 Year-over-year inflation came in at 3.1%.\u00a0 On a monthly basis, prices rose 0.3% in January, higher than the 0.2% seen in December.\u00a0 BLS CPI release<\/a>\u00a0 CNBC CPI and rates<\/a><\/p>\n The Producer Price Index<\/a> tracks the prices domestic producers receive for their output from customers who are not end-consumers, and it provides a measure of insight into future consumer price levels as producer prices move through the supply chain toward end-buyers.\u00a0 The PPI rose 0.3% in January after declining 0.1% in December.\u00a0 The increase may have been small, but a price increase does not support falling interest rates.\u00a0 BLS PPI release<\/a> \u00a0\u00a0CNBC and PPI<\/a><\/p>\n Inflation news dominated the economic releases in Canada.\u00a0 The Consumer Price Index (CPI) rose 2.9% on a year-over-year basis, down from 3.4% in December.\u00a0 Gasoline prices that fell 4% in January (year-over-year) led the slowing rate of annual inflation.\u00a0 Excluding gasoline, consumer prices rose 3.2% last month.\u00a0 Grocery prices remain above the aggregate rate of inflation at 3.4% but have lowered from December\u2019s 4.7% level.\u00a0 Mortgage interest costs were the largest driver of inflation, increasing at an annual rate of 27.4%, while housing rental costs grew by 7.9% on a year-over-year basis.\u00a0 The cost of housing, both owned and rented, has been driven by previous interest rate increases.\u00a0\u00a0 StatsCan CPI release<\/a>\u00a0\u00a0 CBC and inflation<\/a><\/p>\n The Federal Reserve released the minutes of its latest interest rate meeting. Although \u201cparticipants judged that the policy rate was likely at its peak for this tightening cycle,\u201d consumer spending was an area of concern, and some Fed members noted the risk that \u201cprogress toward price stability could stall.\u201d The timing of interest rate reductions remains uncertain despite the progress against inflation that has been accomplished.\u00a0\u00a0 FOMC Minutes<\/a>\u00a0 CNBC and FOMC Minutes<\/a><\/p>\n The NASDAQ jumped 3%, largely driven by Nvidia, the U.S. computer chip manufacturer at the forefront of the artificial intelligence industry.\u00a0 Nvidia released an optimistic forecast of earnings that projected a threefold increase in quarterly revenue.\u00a0 Its 2023 fourth quarter revenue was $22.1 billion, a 265% increase from Q4 2022.\u00a0 Nvidia\u2019s share price jumped 16% on the day, and its value breached $2 trillion and pulled the NASDAQ along with it.\u00a0 CNBC and Nvidia<\/a><\/p>\n Perhaps the most significant economic news, even for Canada, arrived from the U.S. Bureau of Economic Analysis.\u00a0 The Personal Consumption Expenditures (PCE) price index rose 2.4% in January, and core PCE (excluding food and energy) rose 2.8% on a year-over-year basis, and 0.4% in January.\u00a0 These levels were aligned with analyst expectations.\u00a0 Personal income grew 1.0%, which was well above the prediction of 0.3%.\u00a0 \u201cHot January inflation data adds to uncertainty and pushes back rate cut expectations\u201d according to economic strategist, David Alcaly, at Lazards. PCE and CNBC<\/a> BEA’s PCE<\/a><\/p>\n The U.S. Congress passed another budget bill extending the government\u2019s ability to continue to operate.\u00a0 This was the latest round in a four-part series of short-term solutions that extends some government operations until March 8, and others until March 22, guaranteeing a fifth round of negotiations, grandstanding and infighting.\u00a0 The series of stop-gap measures is likely to continue since neither party seems willing to take the reputational damage of raising the debt ceiling permanently.\u00a0 CNN and spending bill<\/a>\u00a0 CNBC and spending bill<\/a><\/p>\n Strong economic performance may delay interest rate cuts that could propel equities higher.\u00a0 However, the strong performance benefits companies, too.\u00a0 Dialing-in the correct proportions of influences to lower inflation, and not stalling the economy remains the overall goal.\u00a0 The Bank of Canada\u2019s next interest rate announcements are scheduled for March 6, April 10, June 5, and July 24.\u00a0 The U.S. Federal Reserve\u2019s scheduled monetary policy decisions occur on March 20, May 1, June 12, and July 31.\u00a0 According to expectations from CME\u2019s FedWatch tool, interest rate reductions will not occur until June or July.\u00a0 The path of inflation has not slowed sufficiently, yet, to allow central bankers to lower rates.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 CME FedWatch tool<\/a> \u00a0CBC and BoC rates<\/a><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Last Month in the Markets: February 1 \u2013 29, 2024 What happened in February? It was another strong month for equity investors focused on North America.\u00a0 Canada\u2019s S&P\/TSX Composite Index rose over 1.5%, the Dow Jones Industrial Average was up more than 2%, the S&P 500 ballooned by 5.2%, and the NASDAQ Composite jumped 6.1%.\u00a0 […]<\/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-1476","post","type-post","status-publish","format-standard","hentry","category-market-insights"],"yoast_head":"\n![\"North](\"https:\/\/advisor.wellington-altus.ca\/wagner\/wp-content\/uploads\/sites\/95\/2024\/03\/North-American-Equity-Indexes-Feb-2024.png\")
<\/p>\n1. January 31 \u2013 February 2<\/strong><\/h4>\n
2. February 9<\/strong><\/h4>\n
3. February 9<\/strong><\/h4>\n
4. February 13<\/strong><\/h4>\n
5. February 16<\/strong><\/h4>\n
6. February 20<\/strong><\/h4>\n
7. February 21<\/strong><\/h4>\n
8. February 22<\/strong><\/h4>\n
9. February 29<\/strong><\/h4>\n
What\u2019s ahead for March and beyond?<\/h3>\n