Bourstad stock market simulations - Summary of the markets for the week ended on January 3. 2025

2024, a good year for equities

The first week of 2025 was one of falling stock markets and rising sovereign bonds. In the United States, the Purchasing Managers' Index for the manufacturing sector fell below the 50 threshold that separates improving from deteriorating economic conditions; in December, the index declined by -0.3 to 49.4. The year 2024 ended with a significant rise in the stock markets we follow, while bond yields were up for the top-rated countries in our tracking universe. Over the coming week, we'll be watching: in Canada, international trade for November (Tuesday) and employment data for December (Friday); in the United States, international trade for December (Tuesday) and employment data for December, as well as the University of Michigan consumer survey (Friday).

Five of the six stock markets we follow ended the week down. The Toronto Stock Exchange was the only market in our tracking universe to end the week up, with a gain of 1.1%. The U.S. exchanges, the New York Stock Exchange and the NASDAQ 100, did not fare so badly, declining by just -0.5% and -0.7% respectively. The Paris and Tokyo stock exchanges posted losses of -1.0%. The worst decline, however, was seen on the Shanghai Stock Exchange, which fell by -5.6%. For 2024 as a whole, the 6 markets we track recorded an average rise of 16.0%, ranging from a decline of -2.2% for the Paris Bourse to an increase of 24.9% for the NASDAQ 100; the Toronto Stock Exchange recorded a gain of 18.0% over the course of 2024.

Yields on 10-year government bonds are falling for three of the four top-rated countries we track. 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, fell by -3 bps (1 basis point or bps = 0.01%) to 4.60%. The Canadian bond rate fell by -9 bps, leaving the Canadian rate 138 bps lower than the US rate. Germany's bond yield climbs 3 bps to 2.43%. Japan's bond yield falls -1 bps to 1.09%. For 2024 as a whole, the average increase was 41 bps, ranging from 13 bps for the Canadian rate to 70 bps for the US rate.

In the commodities market, two of the four commodities we track are rising. The rising commodities are those most closely followed by the financial press: US oil, up 4.8%, and gold, up 0.7%. Corn retreats by -0.7% and copper by -1.2%. For 2024 as a whole, the average rise in the commodities we track was 7.0%, ranging from a -2.7% decline for corn to a 27.2% gain for gold.

In the crypto-currency sector, the two cryptos we track are both up: bitcoin by 4.1% and ethereum by 9.0%. For 2024 as a whole, the crypto-currencies we track rose by an average of 84.6%: 122.9% for bitcoin and 46.2% for ethereum.

On January 3, it cost 0.4¢ CAD more to buy one US dollar than on December 27. The euro and yen diverged against Uncle Sam's dollar, with the single European currency down -1.1% and the Japanese currency up -0.4%. For the full year 2024, the US dollar appreciated by 7.0% against 6 major currencies (EUR, JPY, CAD, GBP, CHF and SEK).

See the detailed table by following this link:

https://iclf.ca/DL/BTTT_sommaire_marches_250103.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.