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What’s going on here?
On the last trading day of 2024, S&P/TSX Index futures climbed 0.3% in pre-market action, highlighting investor optimism despite a bumpy December.
What does this mean?
December tested Canada’s main share index with a 4% drop, marking its worst month since May 2023 amid persistent hawkish moves from the US Federal Reserve and local political uncertainties. Still, a softer approach from global central banks pushed the TSX toward a near-stellar 18% annual return, its best since 2021. Commodity prices gained momentum, with oil buoyed by promising manufacturing data from China and gold sparkling due to central bank purchases and ongoing geopolitical tensions. However, anticipation of deep US interest rate cuts has cooled, particularly with potential policy shifts expected during Donald Trump’s upcoming White House term.
Why should I care?
For markets: Canadian markets steady in turbulent waters.
Investors are focused on employment reports from Canada and the US to forecast future policy directions. Despite the TSX’s December slip, optimism persists, relying on commodity price momentum and overall economic resilience. As 2025 approaches, attention is turned to market reactions to anticipated fewer rate cuts amid changing economic policies.
The bigger picture: Global dynamics drive market rhythm.
As global markets transition into the new year, Canada and the US are key players. Energy and precious metals remain attractive due to geopolitical events and supply chain shifts, highlighting a transforming landscape for investors looking beyond immediate rate policy prospects.
