Media Room
The week in the markets –
September 27, 2024
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After years of anticipation, is China finally joining the stock rally?
- This was an incredible week for Chinese equities.
- It wasn't on anyone's bingo card for this week, but the People’s Bank of China finally stepped in to support the market.
- Micron shut down claims that the AI rally was over.
Earlier this week, the CSI 300 Index — China’s equivalent to the S&P 500 — was up more than 10%. After shedding $6 trillion in value over the past three years, Chinese stocks are getting a boost. The People’s Bank of China has decided enough is enough, with Beijing’s top leaders unveiling a series of fresh stimulus measures aimed at revitalizing the economy. Over the past couple of years, Xi Jinping’s government had tried smaller-scale interventions, but they didn’t deliver the expected turnaround, with the economy hitting its lowest growth rate in five quarters.
This could very well be the start of more measures to come, rather than a one-off event. With interest rates at historic lows, China has the capacity to further stimulate its economy, even if it means slightly higher yields. Given that the U.S. Federal Reserve has started to cut interest rates, China now has more room to manoeuvre. If these new measures succeed in restoring confidence (and the overwhelmingly positive reaction in Chinese stocks this week suggests they might), then we could soon see a surge of inflows into Chinese markets.
Meanwhile, memory chip manufacturer Micron Technology (which was trading around $150 earlier this summer, before dropping below $100 recently) delivered stellar results this week. Despite growing sentiment that the AI trade was fading, Micron proved otherwise. Its stock jumped 15% on impressive earnings, sparking gains across other chip manufacturers and their suppliers.
If there’s one lesson from this week, it’s the importance of diversification. Global sentiment was weakening on chip manufacturers and close to its weakest on Chinese equities, yet here we are. As our team always says: never all-in, never all-out.
Listen to this week’s podcast for further insights.
This week's market closing value - week ending September 27, 2024
(As of 4:00 PM ET.*)
| EQUITY INDICES | Level | Change | WTD | YTD | 1-year | 5-year |
| CAD | CAD | CAD | CAD | |||
| S&P/TSX | 23,993.04 | 132.09 | 0.55% | 14.47% | 23.45% | 7.52% |
| S&P 500 | 5,737.53 | 24.52 | 0.09% | 22.63% | 34.43% | 14.60% |
| DJIA | 42,313.00 | 250.19 | 0.25% | 14.50% | 26.31% | 9.99% |
| FTSE 100 | 8,320.76 | 90.77 | 1.19% | 15.15% | 20.93% | 4.46% |
| CAC 40 | 7,791.79 | 291.53 | 3.55% | 6.54% | 17.27% | 7.54% |
| DAX | 19,473.63 | 753.62 | 3.68% | 19.90% | 36.20% | 10.37% |
| Nikkei | 39,829.56 | 2,105.65 | 6.46% | 20.38% | 29.62% | 7.11% |
| Hang Seng | 20,632.30 | 2,373.73 | 12.94% | 24.06% | 18.08% | -3.93% |
| CURRENCY RETURNS |
CAD | Change | WTD | YTD | 1-year | 5-year |
| US$ | 1.3518 | -0.0046 | -0.34% | 1.99% | 0.15% | 0.41% |
| Euro | 1.5089 | -0.0050 | -0.33% | 3.14% | 6.43% | 0.81% |
| Yen | 0.0095 | 0.0001 | 0.83% | 1.14% | 5.35% | -4.98% |
| CANADIAN TREASURIES | Yield | Change | COMMODITIES | USD | Change |
|---|---|---|---|---|---|
| 3-month | 4.00 | -0.03 | Oil | $68.58 | -$3.34 |
| 5-year | 2.74 | 0.00 | Gold | $2,651.71 | $30.30 |
| 10-year | 2.96 | 0.01 | Natural Gas | $2.91 | $0.47 |
| 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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