Bourstad stock market simulations - Summary of the markets for the week ended on September 8, 2023.

Stocks and bonds down

The financial week ended with declines for the main financial asset classes. In Canada, the Bank of Canada left its key rate unchanged at its update meeting on Wednesday. In addition, employment data released on Friday showed strong job creation in August, but the unemployment rate was unchanged, as strong population growth absorbed the surge in employment. In the United States, data from the Institute of Supply Management (ISM) showed that the non-manufacturing sector remained strong in August, at a 6-month high. In addition, the Federal Reserve published its financial report on the financial health of the various economic agents in the 2nd quarter of 2023, showing, among other things, the particularly favourable situation of US households, whose net worth rose by 3.7% in the period from April to June 2023. To watch over the coming week: in Canada, July manufacturing sales and August home resales (Friday); in the U.S.: August consumer price index (Wednesday) and August retail sales (Thursday).

The six stock markets we follow ended the week down. The Toronto Stock Exchange was down -2.3%, despite oil's strong performance over the past few weeks. The US stock markets were also down, with the New York Stock Exchange down -1.3% and the NASDAQ 100 down -1.4%. The Paris Bourse was down -0.8%, but remains up 11.9% to date in 2023. Asian stock markets fared better, with declines of -0.5% for the Shanghai Stock Exchange and -0.3% for the Tokyo Stock Exchange.

Yields on 10-year government bonds are on the rise for the four top-rated countries we track. Higher yields mean lower bond prices, given the inverse relationship between yields and bond prices. U.S. bond yields, the main benchmark on the market, are up by 9 bps (1 basis point or bps = 0.01%). Canadian bond yields jump by 11 bps, leaving Canadian yields 60 bps below U.S. yields. Germany's bond yield rose by 6 bps to 2.61%. Japan's bond yield climbed 3 bps to 0.65%.

On the commodities market, two of the four commodities we track are up. Oil is up 2.3% after Saudi Arabia confirmed the extension of its production cut of 1 million barrels per day (bpd), in force since July, until the end of December 2023; moreover, the Wall Street Journal reported on September 1 that Aramco, 90% owned by the Saudi Arabian government, plans to issue USD 50 billion worth of shares in the near future. Corn was the other rising commodity in our tracking universe, with a gain of 0.5%. The metals in our tracking universe are the downside commodities, with gold down -1.1% and copper -3.5%; the red metal is being dragged down by production surges in South America and the -5% drop in Chinese imports of the metal in August.

In the crypto-currencies sector, the 2 cryptos we follow have seen a slight rebound after 3 weeks of decline: bitcoin is up 0.5% and ethereum, 0.4%.

As of September 8, it costs 0.5¢ CAD more to buy one US dollar than it did on September 1. The euro and yen are also down against Uncle Sam's dollar: the single European currency, by -0.7%, and the Japanese currency, by -1.1%.

See the detailed table by following this link:

https://iclf.ca/DL/BTTT_sommaire_marches_230908.pdf

Paul Bourget
Project Director, Bourstad
CIRANO
paul.bourget@cirano.qc.ca

About CIRANO (www.cirano.qc.ca )

The Center for Interuniversity Research and Analysis of Organizations (CIRANO) is a multidisciplinary, liaison and transfer research center, whose mission is to accelerate the transfer of knowledge between the research community and users in industry and public services.

About BOURSTAD (www.bourstad.ca )

The Bourstad program is an activity of the Center for Interuniversity Research and Analysis of Organizations (CIRANO) which receives support from many partners for this financial education project: the Autorité des marchés financiers, its main partner, TD Bank, CFA Montreal, Les affaires, the Canadian Investment Regulatory Organization (CIRO), Finance Montreal, TMX Group, Hyprasoft, Croesus, Groupe Investissement responsable and QuoteMedia.