It was a mixed week on the markets. Equity markets look to end flat, while bonds sold off as yields ticked a bit higher this week. The big winner was Bitcoin, which broke through the $70,000 mark earlier this week before falling back. Oil is showing some strength as projected supply increases lag projected increases in demand.
| Index | Close Feb. 7th 2024 | Close Mar. 14th 2024 |
| S&P500 | 5,157 | 5,142 |
| TSX60 | 21,795 | 21,760 |
| Canada 10 yr. Bond Yield | 3.37% | 3.53% |
| US 10 yr. Treasury Yield | 4.09% | 4.30% |
| USD/CAD | $1.34570 | $1.35371 |
| Brent Crude | $82.96 | $85.28 |
| Gold | $2,159 | $2,163 |
| Bitcoin | $67,342 | $69,162 |
Source: Trading Economics & S&P Cap IQ
Both consumer (CPI) and producer (PPI) inflation reports for the US came in a bit higher than hoped. Hence the tick-up in bond yields. Core and headline CPI came in higher than expected. Core CPI ticked down a bit to 3.8% (from 3.9% in January), and headline ticked up slightly to 3.2%. Food prices were benign, while gasoline prices were up 3.8%. PPI was up 0.6% month over month vs. expectations of 0.3% and a decline of 0.1% in January. All this will keep the Federal Reserve on hold.
Oil prices have been stronger recently, with both supply and demand factors coming into play. Despite the slowdown in China’s economy, demand continues to climb. However, supply is not climbing as fast for several reasons, including Saudi / OPEC production cuts, shipping issues in the Red Sea, and “outages” in Russian refineries.
Social Media app TikTok is in the crosshairs of the US Congress right now. The app is part of Bytedance, a Chinese technology company. Congress has passed the first reading of a Bill to ban TikTok from the US. Now, former US Treasury Secretary Steve Mnuchin is trying to put together a group to buy the app from Bytedance and make it a US-owned company. Needless to say, neither TikTok users nor the Chinese government are amused.
Canadian farmland bucked the trend in real estate prices last year, appreciating 11.5%. BC was the odd province out where prices declined, but it still has some of the most expensive land in the country. The high prices are making it difficult for farmers to acquire their first operation or for existing farmers to expand. Farmland is a unique asset class that can be found in the portfolios of insurance companies and pension funds. (The land is usually leased back to others to operate.)
The Victoria real estate market has held steady over the past year. February saw slightly more activity, with more houses changing hands, but prices were down 0.30%. The market appears to be in balance, with little pressure to favor either buyers or sellers.
We are flying home tomorrow after our stay in Scarborough (Toronto), where Sophie (1 yr.) was kind enough to share her cold. We’ll close off with this classic from Simon and Garfunkle… enjoy!
Russ Lazaruk, RIAC, CIWM, CIM, FCSI
Managing Director & Portfolio Manager
