Bourstad stock market simulations - Summary of the markets for the week ended on November 29, 2024

Stocks and bonds rise again

At the end of a curtailed week on the US markets, equities and bonds are back on the rise. In Canada, gross domestic product (GDP) data for the third quarter showed annualized growth of 1.0%, i.e. -0.1% below economists' expectations. It should be noted that the cumulative decline in GDP per capita reached -3.5%, a drop not seen outside a recession according to National Bank economists. In the U.S., inflation measured by the personal expenditure index rose by 0.2% in October to an annual rate of 2.3% for the full basket, while the increase was smaller for the basket excluding food and energy, rising by 0.1% to an annual rate of 2.8%. In addition, the household savings rate was measured at 4.4%, a few percentage points below the pre-pandemic levels. Over the coming week, we'll be keeping an eye on: in Canada, third-quarter labour productivity (Wednesday), October international trade balance (Thursday) and November employment data (Friday); in the US, November manufacturing Purchasing Managers' Index (Monday), October manufacturing orders (Wednesday) and November employment data (Friday).

Four of the six stock markets we follow ended the week higher. The Shanghai Stock Exchange recorded the biggest gain, up 1.8%. The other markets up were the North American markets. In the United States, the New York Stock Exchange gained 1.1%, while the NASDAQ 100 appreciated by 0.7%. In Canada, the Toronto Stock Exchange ended the year up 0.8%, for a total gain of 22.4% since the start of 2024. Declining markets were the Paris Bourse, which lost -0.3%, and the Tokyo Stock Exchange, down -0.2%.

Yields on 10-year government bonds are falling for 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, fell by -24 bps (1 basis point or bps = 0.01%) to 4.18%. The Canadian bond rate fell even further, down -31 bps, leaving the Canadian rate 106 bps below the U.S. rate. Germany's bond yield fell by -16 bps to 2.09%. Japan's bond yield fell by -3 bps to 1.05%.

On the commodities market, three of the four commodities we follow are down. The commodities most closely followed by the financial press, oil and gold, are down the most, by -4.5% and -2.7% respectively; in the case of oil, OPEC+'s decision to postpone its next meeting until December 5 is fuelling speculation about production increases planned for 2025. Corn for March delivery was down -0.5%; traders in this market are concerned that China, Mexico and Canada are the three main export markets for US corn in the wake of President-elect Donald Trump's expressed intention to implement or raise tariffs on all US imports from these three countries.

In the crypto-currency sector, the two cryptos we're tracking are diverging: bitcoin down -1.9% and ethereum up 8.2%.

On November 29, it cost 0.2¢ CAD more to buy one US dollar than on November 22. On the contrary, the euro and the yen are rising sharply against Uncle Sam's dollar: the European single currency by 1.5% and the Japanese currency by 3.4%.

See the detailed table by following this link:

https://iclf.ca/DL/BTTT_sommaire_marches_241129.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.