Bourstad stock market simulations - Summary of the markets for the week ended on September 13, 2024

North American markets post strong equity gains

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.