Insights & Resources

Capital markets bounced back in November, solidifying the status of 2023 as a comeback year.

Read the November 2023 Market Commentary here.

Here’s a summary of the main events that steered the markets:

Monthly market developments

• Equities posted strong monthly gains driven by investor optimism that central banks might be finished with rate hikes. The TSX was up 7.5%, the Dow 9.2%, the S&P500 9.1% and the NASDAQ 10.8%.
• Yields on U.S. Treasuries and Government of Canada bonds fell on positive inflation news, boosting bond prices. Global bonds yields followed U.S. yields lower, delivering their best month since December 2008.
• Oil prices continued slipping, despite another production cut by Saudi Arabia and OPEC. The recent drop is due to a shift in market sentiment from bullish geopolitical risks to bearish macroeconomic concerns, including weakening oil demand in China, oversupply, and softening U.S. economic data.
• The latest data on Canadian job openings and U.S. jobless claims indicated the job market is cooling. Central banks have been anticipating a slowdown, seeing it as a necessary evil to curb inflation.
• Manufacturing and service sector indicators from Europe and the U.K. are signaling a slowdown in business activity. This downturn is echoed in China’s export figures, which have declined for the seventh consecutive month, highlighting a protracted global decrease in demand for goods.
• The Bank of Japan kept its overnight interest rate at -0.1% but began moving away from its ultra-accommodative policy by removing the 1% cap on 10-year bond yields. The Bank of England (BoE) also maintained its rate at 5.25%. The BoE has become more pessimistic about the U.K. economy, forecasting flat to negative GDP growth but is reluctant to lower rates due to high inflation, which stands at 4.7%.
• U.S. CPI dropped from 3.7% to 3.2%, much lower than expected. The Fed held the target range for the Federal Funds rate at 5.25-5.5%, citing strong economic activity and tightening financial conditions. It stated any further policy changes would be driven by data on economic growth, labour trends, and the impact of rising yields.
• Canadian CPI decreased from 3.8% to 3.1%, led by falling gasoline prices. Bank of Canada (BoC) governor Macklem said interest rates may already be high enough to bring inflation back to the BoC’s 1-3% target, but reaffirmed it is ready to hike again if inflation doesn’t continue to come down.

How does this affect my investments?

Central banks are gradually acknowledging monetary policy may now be tight enough to overcome high inflation, although they aren’t committing to reversing course on rates yet. Driven by lower interest rate expectations and solid earnings growth, markets are poised positively as we enter the final month of 2023.

Regardless of where we are in the market cycle, it’s important to take a disciplined approach to investing and stay focused on your long-term goals. This strategy helps you keep your emotions out of investing, typically buying high and selling low like many investors do. Ongoing monitoring and reviewing of your portfolio also ensures it remains on track. Diversifying investments reduces risk as well.

We can help

If you’re thinking about supplementing your RESP with another investment vehicle, we can help you with navigating the various options. We work with business professionals, executives, and families to grow and protect their wealth using our Wealth Plan formula. To discuss our approach and if it is the right fit for you, we invite you to schedule a no-obligation discovery consultation.

Important Disclaimers

The information in this letter is derived from various sources, including CI Global Asset Management, the Federal Reserve, Statistics Canada, U.S. Bureau of Labor Statistics, Bloomberg, Reuters, Investment Executive, Wall Street Journal, Breitbart, LinkedIn, and the Toronto Sun as at various dates. This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources and reasonable steps have been taken to ensure their accuracy. Market conditions may change which may impact the information contained in this document. Before acting on any of the above, please contact me for individual financial advice based on your personal circumstances.