Bourstad stock market simulations - Summary of
the markets for the week ended on July 26, 2024
Only bonds end the week higher
Another difficult week for equities and commodities, while the US dollar
and crypto-currencies move with no clear direction. In Canada, the week saw the
Bank of Canada cut its key interest rate by -0.25% to 4.5%. In the U.S., a
preliminary estimate of economic growth in Q2 showed annual growth of 2.8%; the
strength of the U.S. economy shows no sign of slowing for the time being. The
June inflation rate based on personal consumption expenditure was also
published, declining by -0.1% for the full basket, giving an annual rate of
2.5%; the annual rate for the basket excluding food and energy remained
unchanged at 2.6%. Over the coming week, we'll be keeping an eye on: in Canada,
May's gross domestic product (Wednesday); in the United States, the Conference
Board's household confidence index (Tuesday), the Federal Reserve's decision on
its key rate (Wednesday) and July's employment data (Friday).
Five of the six stock markets we follow ended the week down. The Toronto
Stock Exchange was the only market to end the week up, with a gain of 0.6%; the
Canadian stock market reacted well to the key rate cut, particularly for the
utilities, communications and financial services sectors. The Tokyo Stock
Exchange fell by -6.0%, while the yen has risen by 5.2% over the past two weeks
against the US dollar, putting Japanese exporters at a disadvantage. The NASDAQ
100 is down -3.0% this week, bringing the index's advance to 13.1% since the
start of 2024. The Shanghai Stock Exchange is down -3.1% on the week and
remains the worst-performing market in our 2024 tracking universe, with a
decline of -2.8%. The New York and Paris stock exchanges limited their losses,
with declines of -0.8% and -0.2% respectively.
Yields on 10-year government bonds are falling for three of the four
top-rated countries we track. Lower yields mean higher bond prices, given the
inverse relationship between yields and bond prices. The U.S. bond yield, the
market's main benchmark, is down -4 bps (1 basis point or bps = 0.01%) to
4.20%. The Canadian bond yield fell by -8 bps, leaving the Canadian yield 88
bps lower than the U.S. yield. Germany's bond yield is down -6 bps to 2.41%.
Japan's bond yield rose by 2 bps to 1.04%, above the 1% upper limit set by the
country's central bank for this maturity.
On the commodities market, three of the four commodities we follow are
down. The main declines were in industrial commodities, oil and copper, which
fell by -3.7% and -2.7% respectively. Gold limited its losses to -0.6%. Corn
ended up 1.3%, but remains the only commodity in our tracking universe down on
its price at the start of 2024.
In the crypto-currencies sector, the two cryptos we follow diverged:
bitcoin up 1.2% and ethereum down -7.2%.
On July 26, it cost 1.0¢ CAD more to buy one US dollar than on July 19.
The euro and yen are evolving divergently against Uncle Sam's dollar, with the
single European currency down -0.2% and the Japanese currency up 2.4%.
See the detailed table by following this link:
https://iclf.ca/DL/BTTT_sommaire_marches_240726.pdf
Paul Bourget
Project Director, Bourstad
CIRANO
paul.bourget@cirano.qc.ca
About
CIRANO (www.cirano.qc.ca )
The Center
for Interuniversity Research and Analysis of Organizations (CIRANO) is a
multidisciplinary, liaison and transfer research center, whose mission is to
accelerate the transfer of knowledge between the research community and users
in industry and public services.
About
BOURSTAD (www.bourstad.ca )
The
Bourstad program is an activity of the Center for Interuniversity Research and
Analysis of Organizations (CIRANO) which receives support from many partners
for this financial education project: the Autorité des marchés financiers, its
main partner, TD Bank, CFA Montreal , the Canadian Investment
Regulatory Organization (CIRO), Les Affaires, Finance Montreal, TMX Group,
Hyprasoft, Groupe Investissement
responsable and QuoteMedia.