Below, you will find our monthly market update and relative information that pertains to the current state of the economy.
Market Update
- Half of the major market indices have closed slightly higher than the beginning of the month.
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- The S&P 500 finished at 6,047.15 pts (+5.56%)
- The DOW finished at 44,782.00 pts (+6.49%)
- The NASDAQ finished at 19,403.95 pts (+6.38%)
- The TSX finished at 25,590.33 pts (+5.50%)
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Canada
Monetary Policy
- On December 11th, The Bank of Canada (“BoC”) decided to reduce the overnight lending rate by 50bps.
- Currently, the overnight rate is 3.25%, the Bank Rate is at 3.50%, and the deposit rate is at 3.25%.
- With inflation now back around the 2% target, the BoC decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range.
- The first interest rate announcement for 2025 will happen on January 29th.
Economic Data
- Canada’s inflation rate accelerated in October, rising from to 2.0% from 1.6% in the previous month
- This higher rate was primarily driven by energy prices falling at a slower pace than September.
- Measures of core inflation also increased in October.
- Canada’s economy grew at a meagre pace in the third quarter of 2024, expanding by 1.0%, annualized. Third-quarter growth was the slowest since the fourth quarter of 2023.
- According to the Canadian Real Estate Association (“CREA”), existing home sales in Canada surged higher by 7.7% in October, the largest increase since December of last year.
U.S.
Monetary Policy
- The Fed announced that there will be no change to its federal rate in its November meeting by 50bps.
- The target range for the federal funds rate is still 4.75-5.00%.
- The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.
- The biggest driver of the rate cut seemed to be the loss of momentum in the U.S. labour market.
- Fed officials expressed concern about the labour market and reiterated the central bank’s stance on maximizing employment.
- The next meeting will take place on December 17th – 18th .
Economic Data
- With a softer decline in energy prices, the annual inflation rate in the U.S. increased to 2.6% in October, from 2.4% in the previous month.
- Core inflationary pressures remain elevated, holding steady at 3.3% year-over-year in October.
- Sales of existing homes in the U.S. surged higher by 3.4% to 3.96 million in October.
- October’s growth was the largest since February 2024.
- With the number of homes for sale on the rise, demand expected to pick up amid relatively stronger economic conditions and the U.S. Federal Reserve Board expected to lower rates, albeit gradually, the U.S. real estate market may be preparing to rebound.
Global
- The U.K.’s annual inflation rate was 2.3% in October, up from 1.7% in September and above the 2.2% economists expected.
- A flash estimate showed Europe’s inflation rate was 2.3% in November, matching estimates, and up from the 2.0% rate in October.
- This marked the highest rate of inflation in Europe since August 2024 as energy prices fell less than the previous month.
- China’s stimulus measures appear to be helping lift domestic demand, which is a positive sign for its struggling economy.
- Retail sales increased by 4.8% year-over-year and industrial production increased by 5.3% year-over-year in October.
Notes From our Firm
- As we near the end of another year, we wanted to take a moment to thank you for your continued trust and support. It has been our pleasure to work with you and we are grateful for the opportunity to serve you. We wish you and your loved ones a happy and safe holiday season. We look forward to continuing to work with you in the new year and to helping you achieve your financial goals.
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