Download The Performance Summary Table
Welcome to our review of the third quarter of 2024. We’re breaking down the major market movements and what it means for you as an investor. Let’s take a look at how the markets performed, interest rates, and the outlook for the rest of the year.
Canada Leads the Way
In Q3 2024, Canada had one of the strongest performances in the global markets, with a 10.5% increase. In comparison, the S&P 500 (which tracks the top US companies) grew by just 4.7%. The NASDAQ, which is known for tech stocks, had a small gain of 1.4%. Overall, most sectors and asset classes saw positive results.
Bonds, which have struggled in recent years, had a decent 12-month performance, thanks to falling interest rates that pushed bond prices higher. However, the returns over the past three years remain flat.
Interest Rates and Inflation Cooling Down
Interest rates are starting to drop. Just a few months ago, five-year GICs (Guaranteed Investment Certificates) offered 5% interest, but now they’re down to around 4%. For government bonds, lending money to the Canadian government for five years will earn you 3.5%, while 10-year bonds are offering slightly less.
Inflation, the rise in prices of goods and services, also seems to be cooling off. Commodity prices for things like soy, oil, and wheat have dropped significantly, with soy down 45% from its peak. This means inflation could continue to slow down in the coming months, but it will take time for these price changes to affect what we pay at the store.
More Sectors Are Doing Well
One of the highlights of Q3 was the fact that more sectors of the market are performing well, not just tech or energy. This is a good sign of a healthy, balanced market, where different industries are contributing to growth.
AI Continues to Make Headlines
Artificial intelligence (AI) has been one of the big topics of 2024. Platforms like ChatGPT have seen rapid adoption, and AI is becoming a major driver of interest and investment. If you haven’t tried out AI tools yet, now might be a good time to explore how they can benefit you.
Consumer Spending: Mixed Results
Consumer spending has been a bit of a puzzle. In some areas, people are still spending well, while other parts of the economy are feeling the pinch from higher inflation and rising housing costs. As inflation continues to ease, we should see spending become more balanced across the board.
What’s Next?
As we move forward into the last quarter of 2024, we’ll be watching interest rates, inflation, and consumer spending closely. For investors, staying focused on companies with solid dividends and strong management will help navigate the market’s ups and downs.
Thanks for reading our Q3 2024 market review. If you have any questions, feel free to reach out to us at Exponent Investment Management. We’re always happy to help!
