The last quarter was a very interesting one in many, many ways.
A hurricane season like perhaps no other wreaked havoc throughout the U.S. Gulf Coast and the Caribbean. While not many lives were actually lost, millions were changed. The financial cost will be immense. And, while technically on the first day of the current quarter and not the last one, the events in Las Vegas shook the world. I have never seen such tragedy in the space of a few weeks.
And then we have the twitter back and forth between the leaders of the U.S. and North Korea. On the face of it it seems ridiculous, even funny. But when you think of the two people involved, their egos and the weapons that each side have, well, it becomes a lot more serious.
One might think that all of this would have cast a cloud on markets, but that was not the case at all. All of the major indices that we track were higher during the last quarter. If there is one thing that you can rely on in terms of markets, it’s that higher corporate earnings mean higher stock prices. Earnings have continued to rise, as have markets.
In Canada, the market rose almost 4% during Q3. This gain was the result of strong results from the financial services and energy sectors, up 4.5% and 6.6% respectively. Those two sectors account for 55% of the value of the index.
The S&P 500 rose for the eighth consecutive quarter. That is a run that has not been seen for 20 years. International equities also showed gains over the quarter.
The bond universe, as one might expect, was not as strong. Higher interest rates led to declines of around 2% in both investment grade and high-yield bonds.
The Canadian dollar was strong during the quarter, boosted by two rate hikes by the BoC. Where we go from here with rates remains to be seen, but the prevailing view at this point is that there will be no further increases until 2018.
While there are still a lot of political uncertainties, economic growth remains solid. The fourth quarter is generally a good one for markets, so we expect positive results for the rest of this year.
President, HG Partners Limited
Director, Private Client Group &
Senior Financial Advisor,
HollisWealth a trade name of Investia Financial Services Inc.
This article was prepared solely by Howard Goodman who is a registered representative of HollisWealth® a trade name of Investia Financial Services Inc. (a member of the Mutual Fund Dealers Association of Canada and the MFDA Investor Protection Corporation). The views and opinions, including any recommendations, expressed in this article are those of Howard Goodman alone and they are not those of HollisWealth®
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