In the fourth quarter of 2024, North American financial markets exhibited notable performance across both equities and fixed income sectors. Leading up to, and immediately following, the US election equity markets gained ground before eventually tailing off in the lead up to Christmas. The TSX concluded the quarter with a total return of approximately 3%, defying earlier expectations. This robust performance was broad-based, with seven out of eleven sectors posting gains, led by Information Technology, Financials, and Energy sectors. The S&P 500 index rose by 2% during the quarter, reaching new record highs in December. Gains were uneven, with sectors such as Consumer Discretionary, Telecommunications, and Information Technology hitting new highs, while others remained flat or negative.

Bond markets in North America experienced mixed outcomes during the quarter. The Bloomberg U.S. Aggregate Bond Index declined by 3.06% in Q4, primarily due to a shift higher in rates. In Canada, the fixed income market faced challenges amid a relatively weak economy and potential tariff threats from the U.S. Despite these headwinds, the market’s performance was bolstered by a shift in monetary policy from restrictive to neutral and benefits from currency depreciation.

Outlook:
Looking ahead, the positive momentum in equity markets may persist into 2025, albeit at a moderated pace. The Bank of Canada’s interest rate cuts coupled with deteriorating economic data have placed downward pressure on the Canadian Dollar. Further, a potential trade war due to the imposition of U.S. tariffs under the Trump administration poses risks for both economies. Our portfolio management team is maintaining a
balanced approach, considering both the opportunities and risks that lie ahead.

-The Gilman Deters Team

I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of Harbourfront Wealth Management. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by Harbourfront Wealth Management Inc. “

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