|  | | | | | Your weekly commentary – For the week ended December 8 | | Global equities struggled for direction over much of the week, but ended higher. After pushing up stocks in November, investors treaded cautiously as they gauged how incoming data might impact central banks' decisions. The S&P/TSX Composite Index ended lower, hindered by weakness in the Energy sector. U.S. equities advanced over the week. Yields on 10-year government bonds in Canada and the U.S. were largely unchanged. Oil and gold prices declined. | BoC expresses ongoing concern about inflation- At its final meeting of 2023, the Bank of Canada ("BoC") held its benchmark overnight interest rate steady at 5.00%.
- December's hold was the third straight by Canada's central bank as it sees its current level as restrictive, which has helped ease demand, economic growth and inflation.
- However, the BoC still sees inflation as a risk, noting it could raise interest rates again should economic conditions warrant.
- The BoC also said it would like to see more progress in bringing down core inflationary pressures.
- Market participants are currently pricing in an interest rate reduction by the BoC sometime in 2024.
| U.S. labour market produces mixed results- The U.S. economy added 199,000 jobs in November, exceeding the job gains in October and economists' expectations. Job gains were relatively broad-based and benefited from the return of striking autoworkers.
- The U.S. unemployment rate edged lower to 3.7% in November from 3.9% in the previous month.
- The data lowered expectations of U.S. Federal Reserve Board rate cuts early next year. However, other measures of the labour market showed it losing a bit of momentum.
- ADP reported that private businesses added 103,000 jobs in November, which was below the 106,000 jobs added in October. Over the past few months, job additions in private businesses have trended at levels not seen since early 2021.
- Meanwhile, job openings dropped to 8.7 million in October, the lowest number since March 2021.
| OECD expects slower growth in 2024- The Organisation for Economic Co-operation and Development ("OECD") released its latest Economic Outlook, where it projects the global economy will expand by 2.7% in 2024, down from this year's expected 2.9% growth.
- The OECD believes tight financial conditions, geopolitical tensions, lower trade activity and weak consumer confidence might all weigh on global economic activity next year
- The economic organization pointed out it believes easing economic growth will be driven by slowing activity in the world's largest economies – the U.S. and China..
- The OECD also expects global inflationary pressures to soften in 2024 and 2025.
- The OECD is an intergovernmental organization with 38 member countries seeking to establish better policies for better lives. It was founded in 1961 to strengthen economic progress and world trade.
| China sees rise in exports- Foreign demand for Chinese goods picked up in November. Exports from China rose by 0.5% year-over-year in November, marking the first increase in seven months.
- November's increase came amid a rise in shipments for steel products and rare earths. Exports to the U.S. increased, which offset a drop in shipments to Japan.
- Conversely, imports fell over the same period, declining by 0.6%.
- In response, China's trade surplus widened in November over October.
- While the uptick in foreign demand is positive for China's economy, it remains relatively sluggish due to muted domestic demand and a weak property market.
| | | | Equity markets | Level | YTD | 1 Yr | | S&P/TSX Composite Index C$ | 20,331.54 | 4.88% | 1.81% | | MSCI USA Index US$ | 4,390.41 | 20.61% | 16.76% | | MSCI EAFE Index US$ | 2,138.43 | 10.01% | 9.01% | | MSCI Emerging Markets Index US$ | 975.01 | 1.95% | 0.60% | | MSCI Europe Index US$ | 1,943.24 | 12.22% | 10.77% | | MSCI AC Asia Pacific Index US$ | 161.08 | 3.43% | 2.52% | | Fixed income market | Level | YTD | 1 Yr | | FTSE Canada Universe Bond Index C$ | 1,099.77 | 4.62% | 1.14% | | FTSE World Broad Investment Grade Bond Index US$ | 207.87 | 2.80% | 1.03% | | Currency | Level | YTD | 1 Yr | | CAD/USD | 0.7362 | -0.33% | -0.03% | | Commodities | Level | YTD | 1 Yr | | West Texas Intermediate (US$/bbl) | 71.23 | -11.25% | -0.32% | | Gold (US$/oz) | 2,004.67 | 9.90% | 12.05% | | Silver (US$/oz) | 23.00 | -3.98% | -0.28% |
| | Market performance – as at December 8, 2023 | | | | | |
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This commentary represents Canada Life Investment Management Ltd.'s views at the date of publication, which are subject to change without notice. Furthermore, there can be no assurance that any trends described in this material will continue or that forecasts will occur; economic and market conditions change frequently. This commentary is intended as a general source of information and is not intended to be a solicitation to buy or sell specific investments, nor tax or legal advice. Before making any investment decision, prospective investors should carefully review the relevant offering documents and seek input from their advisor. You may not reproduce, distribute, or otherwise use any of this article without the prior written consent of Canada Life Investment Management Ltd. Privacy, legal, copyright and trademark information
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