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The week in the markets –
October 4, 2024
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Middle East tensions send oil prices — and Canadian equities — higher
- Escalating tensions between Israel and Iran sent oil prices soaring, raising concerns about global energy stability.
- Key U.S. labour data led to traders scaling back expectations for aggressive U.S. Federal Reserve rate cuts.
- Chinese stocks surged in Hong Kong, driven by government stimulus, but skepticism remained over the rally's longevity.
This week, the markets were rocked by escalating geopolitical tensions and economic uncertainty, with the conflict between Israel and Iran taking centre stage. Investors are now worried about potential disruptions to global oil supplies, which sent prices higher. Further escalations in the Middle East could destabilize energy flows from the region, which would obviously have effects on the global economy. One of the best-performing indexes in the world this week was the S&P/TSX Composite (Canadian equities), which benefits from higher oil prices.
In the U.S., investors anxiously awaited new labour market data, which would heavily influence expectations for U.S. Federal Reserve rate decisions. The ADP Employment Report and the update from the U.S. Bureau of Labor Statistics revealed a higher increase in private sector jobs than predicted, forcing traders to scale back their bets on aggressive rate cuts at the Fed's November meeting, from around 44 basis points (0.44 of a percentage point) to 34 basis points (0.34 of a percentage point). Richmond Fed President Tom Barkin acknowledged that the labour market is solid but cautioned that it's too soon to claim victory over inflation.
Meanwhile, European markets struggled this week. In France, the CAC 40 (a major French stock market index) fell sharply after President Macron pushed for a temporary tax on the country’s largest companies, which added to investor concerns.
On a more positive note, Chinese stocks continued to be the story of the week. Although trading was closed on the Chinese mainland because of the Golden Week holiday, it continued in Hong Kong. Chinese equities continued their impressive rally this week, driven by government stimulus, with the Hang Seng Index climbing by double digits. However, some investors remain skeptical about how long this rally will last, especially with the mainland Chinese market currently on break.
Listen to this week’s podcast for further insights.
This week's market closing value - week ending October 4, 2024
(As of 4:00 PM ET.*)
| EQUITY INDICES | Level | Change | WTD | YTD | 1-year | 5-year |
| CAD | CAD | CAD | CAD | |||
| S&P/TSX | 24,152.53 | 159.49 | 0.66% | 15.23% | 26.89% | 7.98% |
| S&P 500 | 5,743.32 | 5.79 | 0.52% | 23.26% | 33.03% | 14.68% |
| DJIA | 42,352.75 | 39.75 | 0.51% | 15.09% | 26.25% | 10.20% |
| FTSE 100 | 8,280.63 | -40.13 | -1.91% | 12.95% | 19.33% | 4.65% |
| CAC 40 | 7,541.36 | -250.43 | -4.43% | 1.82% | 11.23% | 6.97% |
| DAX | 19,120.93 | -352.70 | -3.05% | 16.24% | 30.68% | 10.16% |
| Nikkei | 38,635.62 | -1,193.94 | -6.86% | 12.12% | 25.30% | 5.75% |
| Hang Seng | 22,736.87 | 2,104.57 | 10.73% | 37.37% | 31.64% | -1.95% |
| CURRENCY RETURNS |
CAD | Change | WTD | YTD | 1-year | 5-year |
| US$ | 1.3574 | 0.0056 | 0.41% | 2.41% | -1.24% | 0.39% |
| Euro | 1.4899 | -0.0190 | -1.26% | 1.84% | 3.20% | 0.38% |
| Yen | 0.0091 | -0.0004 | -3.98% | -2.89% | -1.00% | -6.02% |
| CANADIAN TREASURIES | Yield | Change | COMMODITIES | USD | Change |
|---|---|---|---|---|---|
| 3-month | 3.91 | -0.09 | Oil | $74.47 | $5.89 |
| 5-year | 3.02 | 0.28 | Gold | $2,651.43 | -$0.28 |
| 10-year | 3.20 | 0.24 | Natural Gas | $2.83 | -$0.08 |
| CANADIAN PRIME RATE |
|---|
| 6.45% |
*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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