November 2024 - Monthly Update
Nataliia Riabenko - Nov 01, 2024
Hope this note finds you and your family well as we approach the holiday season.
Your portfolio maintained its positive performance of 2024 in October. It remains with steady and consistent gains over the last twelve months.
The role of the private sector in the United States (U.S.) economy is much more likely to increase rather than decrease going forward. As we've been mentioning recently, the private sector is the source of creativity, innovation and growth that ultimately drives prosperity forward. Central to this reality is the depth and quality of leadership we have in place in North America.
Our core discipline that drives the success of our investment strategy remains: Own a diversified collection of profitable businesses that are central to the economy. These category leaders constantly apply technology to their own operations to innovate, scale and deliver a utility that is central to our present and future. As a natural consequence, these businesses are a store value that endures, is greater than zero and grows overtime through the efforts and energies of people and their hard work.
In the near term, the trend for overnight interest rates remains lower. Even more true today, the trend for Canadian overnight interest rates likely ends at a lower level than what was expected in the recent past.
Consumers and households are the driving force of the U.S. economy. In October, it was announced that over 225,000 net new jobs were created in the U.S. (ahead of expectations). The most recent consumer confidence survey rose by +10% for the strongest monthly gain since March of 2021. All five components of this index improved and underpins the trajectory and stability of path for U.S. economic as one of growth and expansion.
At nearly $30 trillion dollars of annual economic output, the U.S. economy is undisputably back to being the biggest in the world. It is bigger than the next three (China #2, Germany #3 & Japan #4) combined.
Our investment strategy and positioning has been very consistent over the last 15 years. It is North America centric with an intentional preference for businesses with material exposure to the domestic US economy / leading industries in North America.
You and your wealth remain in a strong position.
.
The view from Brian Belski, BMO's Chief Investment Strategist:
“US stock market momentum stalled during October as the S&P 500 [had] its first losing month since April. Much of the weakness occurred in the final week of the month as several [Magnificent Seven] stocks delivered relatively disappointing earnings results, specifically regarding their earnings outlooks. It now appears that beating earnings estimates is no longer enough to sustain the performance of these stocks – investors seemingly want to be “blown away” by results to justify their valuations. Nonetheless, the underlying details of October market performance were slightly more encouraging with roughly 250 stocks outperforming the index and about 200 delivering a positive return. In addition, slightly longer-term trends continue to suggest significantly improving market breadth as investors appear to be slowly rotating out of the “top-heavy” names and exploring opportunities within the hundreds of other index stocks that had been previous laggards despite what we have viewed as attractive fundamental underpinnings for the “rest” of the index. This is a trend that we expect to continue and one we also believe will help to sustain market momentum into year-end, particularly as we enter what has typically been the two best months for the market historically… Although the equity markets were generally soft in October…S&P/TSX still managed to eke out a gain... Indeed, this outperformance was largely driven by strength in the resource sectors… Meanwhile, the more interest sensitive areas that have been outperforming in the past few months, sharply underperformed this month... From our perspective, this is a minor adjustment to being overbought and these sectors will likely continue to benefit from the Canadian easing cycle we expect to continue well into 2025. Overall, we believe Canada remains well-positioned for the coming quarters.”
Stocks in your portfolio that made a new 52 week high this past month:
Fortis*, Home Depot, MasterCard*, Royal Bank*, S&P 500 Index, United Health
Stocks in your portfolio that made a new 52 week low this past month: None
The Loonie eased half a cent versus the U.S. dollar to $0.72
We wish you and your family all our best.
Thank you,
Ian, Gab, Kaitlyn and Nataliia