Media Room
The week in the markets –
February 9, 2024
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Destination 5000
- The S&P 500 Index reached 5000 points, driven by strong earnings.
- U.S. Federal Reserve officials shared mixed views on monetary policy.
- China's economic data worsened, with CPI and PPI indicating deeper deflation, as the U.S. imported more from Mexico than China for the first time in two decades.
The S&P 500 Index reached the milestone of 5000 points, buoyed by the impressive results from many large cap firms this earnings season. Standouts include ARM Holdings and Disney. Disney’s shares surged over 12% following its earnings announcement. But the big one was ARM Holdings, the famous mobile computing company, which saw an exceptional 55% jump in its stock price in just one day. Why? You guessed it: strong AI results.
U.S. Federal Reserve (the Fed) officials expressed varied opinions on the future of monetary policy. One official suggested two to three rate cuts in 2024, emphasizing the need for more inflation data around the 2% level to gain confidence. Yet the wording was interesting here, as Minneapolis Fed President Kashkari said he didn’t need ‘’better inflation data, just additional data near this level.” Meanwhile, patience was advocated by the Richmond Fed President, so it appears that there’s no consensus between the various members of the Fed. Despite these discussions, the market's expectation for rate cuts remained relatively stable, with a roughly 20% probability of cuts by March and around 80% by May. In contrast, European investors have reduced expectations for imminent European Central Bank rate cuts, with the likelihood of a cut at the next meeting reaching its lowest point since October, at 10%. It’s worth noting that these figures have been especially volatile this year.
In China, the bottom seems to have no bottom in terms of macroeconomic data. The country’s inflation as measured by the consumer price index (CPI) fell further, to -0.8%. We are now in actual deflation territory, and it gets worse: its producer price index (PPI) fell deeper into deflation at -2.5%. To add even more uncertainty to the significant amount there already is, China’s leadership announced the removal of the country’s main securities regulator, highlighting leadership concerns over market downturns. Meanwhile, for the first time in two decades, the U.S. imported more goods from Mexico than from China in 2023. This shows the significant shift in global trade dynamics since both the pre-COVID-19 trade wars and the pandemic itself.
A recent Fed report highlighted a $212 billion increase in total household debt during the fourth quarter, reaching $17.5 trillion. This rise was explained of course by rising rates, with the average rate on a credit card reaching an all-time high this week. The debt load increase also led to an uptick in delinquency rates. Despite these changes drawing significant attention in the financial media, keep in mind that overall delinquency rates remain 1.6% lower than the levels observed before the pandemic.
Listen to this week’s podcast for further insights.
This week's market closing value - week ending February 9, 2024
(As of 4:00 PM ET.*)
| EQUITY INDICES | Level | Change | WTD | YTD | 1-year | 5-year |
| CAD | CAD | CAD | CAD | |||
| S&P/TSX | 20,985.10 | -80.66 | -0.38% | 0.12% | 1.88% | 6.06% |
| S&P 500 | 5,022.46 | 56.47 | 1.13% | 6.87% | 23.09% | 13.46% |
| DJIA | 38,671.69 | 17.27 | 0.04% | 4.19% | 14.79% | 9.32% |
| FTSE 100 | 7,572.58 | -42.96 | -0.63% | -1.46% | -0.23% | 1.15% |
| CAC 40 | 7,647.52 | 55.26 | 0.65% | 0.59% | 6.88% | 8.28% |
| DAX | 16,926.50 | 8.29 | -0.02% | 0.25% | 9.55% | 8.42% |
| Nikkei | 36,897.42 | 739.40 | 1.35% | 5.77% | 17.85% | 6.21% |
| Hang Seng | 15,746.58 | 213.02 | 1.38% | -6.35% | -26.91% | -10.54% |
| CURRENCY RETURNS | CAD | Change | WTD | YTD | 1-year | 5-year |
| US$ | 1.3458 | -0.0001 | -0.01% | 1.54% | 0.03% | 0.27% |
| Euro | 1.4516 | -0.0011 | -0.07% | -0.78% | 0.47% | -0.70% |
| Yen | 0.0090 | -0.0001 | -0.68% | -4.07% | -11.89% | -5.72% |
| CANADIAN TREASURIES | Yield | Change | COMMODITIES | USD | Change |
|---|---|---|---|---|---|
| 3-month | 4.88 | -0.07 | Oil | $76.50 | $4.37 |
| 5-year | 3.66 | 0.17 | Gold | $2,025.31 | -$11.67 |
| 10-year | 3.54 | 0.16 | Natural Gas | $1.85 | -$0.24 |
| CANADIAN PRIME RATE |
|---|
| 7.20% |
*The data contained in the charts above is provided by Bloomberg as of 4:00 PM ET. Please note that the final closing market values may vary due to data delays and market settlement.
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