Below, you will find our monthly market update and relative information that pertains to the current state of the economy.

Market Update

• All market indices have closed higher than the beginning of the month.
  • • The S&P 500 finished at 5,648.40 pts (+2.28%)
    • The DOW finished at 41,563.08 pts (+1.76%)
    • The NASDAQ finished at 17,713.62 pts (+0.65%)
    • The TSX finished at 23,346.18 pts (+1.02%)

Canada

Monetary Policy

• On September 4^th, The Bank of Canada (“BoC”) decided to reduce the overnight lending rate by 25bps.
  • Currently, the overnight rate is 4.25%, the Bank Rate is at 4.50%, and the deposit rate is at 4.25%.
  • In the BoC’s most recent outlook, they identify inflation continuing to moderate in 2024 before reaching its 2% target in 2025.
  • The next scheduled date for announcing the overnight rate target is October 23^rd, 2024.

Economic Data

• Canada’s inflation rate was 2.5% in July, down from 2.7% in June, and matching economists’ expectations of 2.5%.
• Gross domestic product in Canada expanded at an annualized pace of 2.1% in the second quarter of 2024.
  • Second quarter growth picked up from the 1.8% increase in the first quarter, the strongest pace of growth since the first quarter of 2023.
• The Canadian economy lost 2,800 jobs in July, which was the second consecutive month of job losses, as the labour market faces challenging conditions amid still tight financial conditions.

U.S.

Monetary Policy

• The Fed announced that it was maintaining its federal rate in its July meeting.
  • The target range for the federal funds rate is still 5.25-5.50%.

• The Fed believes a restrictive rate is still needed but signalled its intention to begin lowering interest rates, which markets expect will be in September.
• The next meeting will take place on September 17^th-18^th.

Economic Data

• The U.S. economy added 114,000 jobs in July, which was below both estimates and the 179,000 job additions in the previous month.
• The U.S. inflation rate was 2.9% in July, just below the 3.0% rate economists had expected, and the lowest rate of inflation in the U.S. since March 2021.
• The U.S. unemployment rate moved higher to 4.3% in July from 4.1% in June. This marked the highest jobless rate in the U.S. since October 2021.

Global

• According to a preliminary estimate, the U.K. economy expanded for a second straight quarter in 2024, rising by 0.6%.
  • This follows a 0.7% expansion in the first quarter of 2024 after falling into a technical recession by the end of 2023.
• China’s annual inflation rate rose to 0.5% in July, topping the 0.3% increase economists had expected, and marking its highest rate since February 2024.
• The European Central Bank has already lowered its policy interest rate this year, with at least one more rate cut expected before the end of 2024.
  • A flash estimate showed the European inflation rate dropped to 2.2% in August, its lowest rate since July 2021.

As always if you have any questions, please feel free to reach out to us. Or, if you know someone who would like an opinion on their investments or insurance, please connect us! There is no better compliment than a referral from one of our current clients.

The Team, C.R. Smith Financial

Community, Respect, Service & Financial Integrity