An excellent week for financial assets as equities, bonds, commodities
and crypto-currencies ended the week higher. In Canada, building permits rose
sharply in July, with their value up 22.9% on June. This was particularly true
for multi-family dwellings, where the number of permits jumped by 29.2%. In the
United States, inflation data for August 2024 showed a -0.4% decline for the
full basket for an annual rate of 2.5%, while the basket excluding food and energy
remained unchanged at 3.2%. These new data have reinforced analysts' confidence
that the Federal Reserve will lower its key rate at its September 17-18
meeting. Over the coming week, we'll be watching: in Canada, July manufacturing
sales (Monday), August inflation (Tuesday) and July retail sales (Friday); in
the United States, August retail sales (Tuesday) and the Fed's key rate
decision (Wednesday).
Five of the six stock markets we follow ended the week higher. The
biggest rises were in the US markets, with the NASDAQ 100 jumping 5.9% and the
New York Stock Exchange 4.0%. Following the release of inflation data, analysts
were divided as to the extent of the key rate cut: -0.25% or -0.5%. The Toronto
Stock Exchange also did very well, with a gain of 3.5%, while several
commodities rose sharply. The Paris and Tokyo stock exchanges gained 1.5% and
0.5% respectively. The Shanghai Stock Exchange was the only market to fall,
down -2.2%.
Yields on 10-year government bonds are down for three of the four
top-rated countries we track, while Japan's bond yield remains unchanged. A
falling yield means a rising bond price, given the inverse relationship between
yields and bond prices. The U.S. bond yield, the market's main benchmark, fell
by -6 bps (1 basis point or bps = 0.01%) to 3.66%. The Canadian bond yield also
fell by -6 bps, leaving the Canadian rate 76 bps lower than the U.S. rate.
Germany's bond yield fell by -3 bps to 2.15%.
On the commodities market, all four of the commodities we track are up.
The metals in our tracking universe, copper and gold, recorded the highest
gains, up 4.0% and 3.2%% respectively; the precious metal is now up 25.0% since
the start of 2024. US oil climbs slightly by 1.4%, but remains below the USD 70
threshold at USD 68.65. Corn rises by 1.7% but remains down -12.3% since the
start of 2024.
In the crypto-currency sector, the two cryptos we follow are both up
sharply: bitcoin and ethereum are up 11.7%.
On September 13, it cost 0.2¢ CAD more to buy one US dollar than on
September 6. The euro and yen are evolving divergently against Uncle Sam's
dollar, with the single European currency down -0.1% and the Japanese currency
up 1.0%.
See the detailed table by following this link:
https://iclf.ca/DL/BTTT_sommaire_marches_240913.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.