Bourstad stock market simulations - Summary of the markets for the week ended on August 30, 2024

Equities up only slightly

The main equity markets ended slightly higher, while bonds, commodities and crypto-currencies ended lower. In Canada, the economy grew at a stronger-than-expected 2.1% annual rate in the second quarter, instead of the 1.8% expected by economists. The main component of this performance was growth in government spending, which accounted for nearly 75% of measured growth. In the United States, a new estimate of second-quarter economic growth was also published, measured at 3.0% annualized; in Canada's southern neighbor, household consumption rose by 2.9% on an annualized basis during the quarter. Inflation rates measured by personal consumption expenditure remained unchanged between June and July at 2.5% for the full basket and 2.6% for the basket excluding food and energy. Over the coming week, we'll be keeping an eye on: in Canada, the Bank of Canada's key rate decision (Wednesday) and August employment data (Friday); in the United States, July international trade (Wednesday) and August employment data (Friday).

Four of the six stock markets we follow ended the week higher. The Tokyo and Paris stock exchanges recorded the strongest gains, with advances of 0.7%. The Toronto and New York exchanges advanced by 0.3% and 0.2% respectively. Declining markets were the Shanghai Stock Exchange (-0.4%) and the NASDAQ 100 (-0.7%).

Yields on 10-year government bonds are rising in three of the four top-rated countries we track. Higher yields mean lower bond prices, given the inverse relationship between yields and bond prices. The U.S. bond yield, the market's main benchmark, is up 10 bps (1 basis point or bps = 0.01%) to 3.91%. The Canadian bond yield rises by 12 bps, making the Canadian rate 75 bps lower than the U.S. rate. Germany's bond yield is up 7 bps to 2.30%. Japan's bond yield fell by -3 bps to 0.89%.

On the commodities market, three of the four commodities we follow are down. The only commodity to rise was corn, which gained 2.6%; the grain, widely used in livestock feed, took advantage of unfavorable weather conditions as several regions in the southern United States were hit by drought. The metals in our tracking universe, gold and copper, declined by -0.4% and -0.8% respectively. US oil is down -1.7% as the high tourist season draws to a close.

In the crypto-currency sector, the two cryptos we follow are both down: bitcoin by -7.8% and ethereum by -8.6%.

On August 30, it cost 0.2¢ CAD less to buy one US dollar than on August 23. In contrast, the euro and yen are trending downwards against Uncle Sam's dollar: the single European currency by -1.3% and the Japanese currency by -1.2%.

See the detailed table by following this link:

https://iclf.ca/DL/BTTT_sommaire_marches_240830.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 , the Canadian Investment Regulatory Organization (CIRO), Les Affaires, Finance Montreal, TMX Group, Hyprasoft, Groupe Investissement responsable and QuoteMedia.