Market Highlights
The third quarter of 2024 was eventful as global interest rate cuts dominated headlines and volatility picked up ahead of the election. Despite huge swings during the quarter, the equity markets ended higher; the S&P 500 (in CAD) gained +4.43%, and the S&P/TSX Composite gained +10.54%. In addition, the Canadian Universe Bond Index rose +4.66% during the quarter as interest rates fell.
Major Themes and Events in Q3 2024
Looking Ahead
All eyes are on the US Presidential Election next week. A common question we receive from clients is “How will the election affect my portfolio?”. US domiciled or denominated investments are the most relevant when contemplating any impact to investors. As Canadians, our client’s US exposure tends to sit well below 50% of their portfolio, so any immediate impact is limited to this level. As for impact on this 50% (or less), it is interesting to note that the last 4 inauguration years {2009, 2013, 2017, 2021) have all seen the S&P500 grow by over 20%. More than anything markets do not like uncertainty, whether at the presidential level or in the legislative branches. Uncertainty in terms of who will govern can lead to near term volatility. The outcome, however, has very limited influence on market performance during inauguration years or presidential terms (see chart below).
There is no discernable pattern in S&P 500 growth in Republican vs Democratic presidencies (see chart below). So, determining whether impact will be positive or negative often has less to do with who wins an election and more to do with getting past the election itself.
Have a great weekend.
-The Gilman Deters Team
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