Media Room
The week in the markets –
May 24, 2024
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In a quiet week, the AI giant’s rise continued
- All eyes on NVIDIA.
- Retailers cut prices to counteract low-income struggles.
- Central bank news suggested delays to rate cuts.
Markets had a slow start to the week, with little news to drive action. Despite low volumes and reduced volatility, equity markets continued to hit record highs, suggesting a positive outlook. Investors have had a good year so far, and investment managers’ pessimism is declining as more money moves into the markets. NVIDIA’s impressive earnings reassured investors about the strength of the AI boom, causing global markets to rally and pushing the NASDAQ toward a new all-time high.
NVIDIA’s results were a big hit, as the company not only raised its Q2 revenue guidance to an impressive $28 billion but also announced a 10:1 stock split (making its stock more affordable to more investors). NVIDIA’s shares jumped 10% by mid-day trading, adding more than $200 billion to its market cap, continuing its rally, which stands at over 90% for the year. The company beat first-quarter expectations and provided a strong outlook; this optimism lifted other tech stocks as well. NVIDIA’s results overshadowed the Federal Reserve’s (the Fed) somewhat pessimistic minutes released on Wednesday, which showed officials are in no rush to cut interest rates.
Which leads us to our weekly segment on central banking news. The U.K.’s Consumer Price Index came in hotter than expected, pushing the anticipated first rate cut to November instead of September. U.S. Treasuries weakened due to the U.K. inflation metrics, though not as much as their European counterparts. The Fed’s minutes didn’t offer much new information, echoing recent comments from Fed officials. Members noted that it might take longer than previously thought to be confident that inflation is moving sustainably to 2%, suggesting that the disinflation process will be slower than anticipated (which was really nothing new). This led to a brief reaction from the markets, which quickly subsided.
On the retail front, some of the nation’s largest retailers are cutting prices in response to low-income consumers struggling financially. Many of these consumers have maxed out credit card debt and drained savings, a situation worsened by inflation (which appears to have particularly hit hard those who don’t own financial assets). Following a weak April retail sales report and warnings from Goldman Sachs about low-income consumers' struggles, Target announced it would lower prices on about 5,000 frequently shopped items. Walmart also reduced prices on 7,000 items to boost food sales in the second half of the year and retain low-income customers. Interestingly, Walmart noted an increase in high-income consumers shopping at its stores, which helped drive grocery sales last quarter.
Listen to this week’s podcast for further insights.
This week's market closing value - week ending May 24, 2024
(As of 4:00 PM ET.*)
| EQUITY INDICES | Level | Change | WTD | YTD | 1-year | 5-year |
| CAD | CAD | CAD | CAD | |||
| S&P/TSX | 22,293.71 | -163.85 | -0.73% | 6.37% | 11.87% | 6.55% |
| S&P 500 | 5,298.40 | -1.83 | 0.38% | 14.47% | 29.41% | 13.78% |
| DJIA | 39,069.59 | -934.76 | -1.93% | 6.88% | 19.73% | 9.20% |
| FTSE 100 | 8,317.59 | -102.67 | -0.56% | 10.84% | 12.95% | 3.09% |
| CAC 40 | 8,094.97 | -72.53 | -0.69% | 8.74% | 13.22% | 8.44% |
| DAX | 18,693.37 | -11.05 | 0.14% | 13.08% | 19.70% | 8.92% |
| Nikkei | 38,646.11 | -141.27 | -0.74% | 7.03% | 12.54% | 5.33% |
| Hang Seng | 18,608.94 | -944.67 | -4.56% | 12.49% | -1.93% | -7.02% |
| CURRENCY RETURNS |
CAD | Change | WTD | YTD | 1-year | 5-year |
| US$ | 1.3665 | 0.0056 | 0.41% | 3.10% | 0.51% | 0.34% |
| Euro | 1.4825 | 0.0029 | 0.20% | 1.33% | 1.45% | -0.30% |
| Yen | 0.0087 | 0.0000 | -0.38% | -7.32% | -10.65% | -6.67% |
| CANADIAN TREASURIES | Yield | Change | COMMODITIES | USD | Change |
|---|---|---|---|---|---|
| 3-month | 4.82 | -0.04 | Oil | $77.75 | -$2.23 |
| 5-year | 3.69 | -0.01 | Gold | $2,334.84 | -$81.08 |
| 10-year | 3.60 | -0.02 | Natural Gas | $2.52 | -$0.11 |
| 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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