Bourstad stock market simulations - Summary of the markets for the week ended on September 27, 2024

Equities, commodities and bonds on the rise

A good week overall for financial markets, with the exception of the US dollar, all the financial asset classes we track are up. In Canada, the economy held up well in July, with gross domestic product up 0.2% on June. However, we note that the public sector is up 2.9% year-on-year, while the durable goods manufacturing sector is down -6.7% and the information and communications technology sector is up just 0.8%. In the United States, inflation as measured by personal consumption expenditure has risen by 2.2% over the past year, down -0.3% on June for the full basket; for the basket excluding food and energy, the annual rate of increase is 0.1%: this rate is now 2.7%. Elsewhere in the world, China announced new economic support measures, which were well received. Over the coming week, we'll be watching: In Canada, the Ivey Purchasing Managers' Index for September (Friday); in the US, the Manufacturing Purchasing Managers' Index for September (Tuesday), August durable goods orders (Thursday) and September employment data (Friday). We'll also be paying close attention to the aftermath of the Israeli strike in Beirut that claimed the life of Hezbollah leader Hassan Nasrallah.

The six stock markets we follow ended the week up. The biggest rise was seen on the Shanghai Stock Exchange, up 12.8% following the announcement of new economic support measures by government and monetary authorities; the impact was also felt on the commodities markets, given China's importance as a resource-consuming country. Other markets that also benefited from these announcements were the Tokyo Stock Exchange, with a gain of 5.6%, and the Paris Bourse, with a rise of 3.9%. The impact was more limited in North America. The NASDAQ 100 and the New York Stock Exchange advanced by 1.1% and 0.6% respectively. The Toronto Stock Exchange climbed 0.4%.

Yields on 10-year government bonds are down for two of the four top-rated countries we track, while the Canadian bond yield is unchanged. A falling yield means a rising bond price, given the inverse relationship between yields and bond prices. The U.S. bond yield, the market's main benchmark, advances by 1 bps (1 basis point or bps = 0.01%) to 3.75%. Canada's bond yield remains unchanged as mentioned, making the Canadian rate 80 bps lower than the U.S. rate. Germany's bond yield fell by -8 bps to 2.14%. Japan's bond yield is down -6 bps to 0.81%.

On the commodities market, three of the four commodities we follow are up. Copper is up 5.9% in response to Chinese economic support measures. Corn gained 4.0%, boosted both by the drought in Brazil and by the possibility of increased demand from China following the support package announced during the week. Gold for immediate delivery gained 1.4% for the week and is now up 28.9% since the start of 2024. The only commodity to fall is US oil, down -5.2% as major producing countries plan to increase production over the coming months.

In the crypto-currency sector, the two cryptos we follow are up: bitcoin by 4.5% and ethereum by 6.1%.

On September 27, it cost 0.6¢ CAD less to buy one US dollar than on September 20. The yen is also up 1.2% against Uncle Sam's dollar, while the euro remains unchanged.

See the detailed table by following this link:

https://iclf.ca/DL/BTTT_sommaire_marches_240927.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.