Stocks rose in September, wrapping up a volatile quarter that featured rate cuts from central banks across the world. Equity markets displayed strong performance despite the fact that September is historically the worst-performing month of the year.
Canada’s benchmark S&P/TSX Composite Index was up 2.8% in September and posted a 9.7% gain for Q3. All 11 of the benchmark’s underlying sectors were positive during the quarter, led by real estate with a 21.9% return. The energy sector lagged during the quarter, posting a gain of just 0.8%. Small-cap stocks, as measured by the S&P/TSX SmallCap Index, gained 7.8% for the quarter.
The U.S. dollar depreciated by 1.1% versus the loonie in Q3, slightly lowering the returns of foreign markets from a Canadian investor’s standpoint. Note that all returns in this paragraph are in CAD terms. U.S.-based stocks, as measured by the S&P 500 Index, rose 2.1% in September and finished the quarter higher by 4.2%. Ten of the benchmark’s underlying sectors were in the green for this quarter, led by utilities and real estate, with respective returns of 17.0% and 14.9%. International stocks, as measured by the FTSE Developed ex-US Index, rose 5.5% during the quarter, while emerging market stocks added 8.5%.
The investment grade fixed income indices we follow were positive in Q3. Canadian investment grade bonds, as measured by the FTSE Canada Universe Bond Index, were up 4.4% during the quarter. The key global investment grade bond benchmark was up 7.0%, while global high-yield issues were up 5.1%.
Turning to commodities, natural gas rose 12.4% for the quarter, while the price of a barrel of crude oil tumbled 16.4% over the same period. Gold, silver and copper all had a positive quarter with respective gains of 12.7%, 7.6% and 3.7%.
In September, the Bank of Canada cut its policy rate by a quarter point to 4.25%, while the U.S. Federal Reserve also lowered its key rate by 0.5%, bringing it to a range of 4.75% to 5.0%. This marked the fist time the policy rate south of the border was cut since March 2020.
Content sourced from Bloomberg; data as at September 30, 2024.
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