Equity markets have continued to break records during November advancing quietly due to less trade news relative to the rest of the year. The S&P TSX Composite (YTD gain 18.5%) is on track to finish the year at its highest calendar year return in a decade, and the S&P 500 (YTD gain 24.2%) is on track to record its highest calendar year return since 2013. No discussion of market performance would be complete without a discussion of risk, which we’ll get into as we continue.
Equity markets fared well throughout the month with the S&P 500 rising to new heights to lead the way. The positive performance can be largely attributed to improving trade sentiment globally while central banks continue to reiterate their accommodative stance.
Political uncertainty dominated the news cycle this month with major developments out of the US, the middle east, the UK, and China to name a few. Despite the noise present in equity markets, their advance continued.
While the trade war between the US and China continued to be in the spotlight during a volatile August, tensions between Hong Kong and mainland China, along with Brexit uncertainty, garnered negative sentiment. Despite these narratives that are contributing to the volatility we have seen, markets still managed to close slightly in the green by month’s end.
The bull market in equities continued its march forward in July and hit new record highs. Developments in global trade and monetary policy dominated market movements throughout the month.
Global equities markets sharply recovered from the losses incurred during May, resulting in one of the best Junes in equity market history. This change was fueled by positive outlooks towards global monetary policy and increased optimism surrounding global trade policies.
Global equities closed the month lower due to continued trade tensions and concerns of a global slowdown in growth. Although volatility has picked up, there hasn’t been any significant deterioration of fundamental conditions. Volatility in a market cycle is normal and expected; while we ideally don’t want too much volatility as markets advance, our minds can be eased knowing that markets have climbed over different walls of worry at different periods in time.
After a strong first quarter, markets continued their rally which has been driven by more accommodative central banks, expectations of a recovery in Chinese growth, and improving trade conditions.
Amid week after week of gains at the start of 2019, we have largely recovered from the lows experienced in Q4 2018. March saw the return of some volatility due to mixed economic data as well as an important development in the bond market.
The 2019 federal budget was unveiled March 19th by Finance Minister Bill Morneau. Key elements included housing affordability measures for first time home buyers, post- secondary student financing and debt repayment, professional development training opportunities, and securing your retirement. Keep in mind this is a pre-election budget and there are elements sprinkled in it for everyone. Funding for many of the commitments will only start to kick in after October’s election, giving voters the chance to weigh in their thoughts at the ballot box.