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Overview

CTI Capital’s monthly review finds that markets entered August cautiously after record-setting July gains. Early weakness came from soft labor data, tariff concerns, and rising bond yields. Resilient corporate earnings and expectations of a Federal Reserve policy shift helped stabilize sentiment by month-end.

U.S. Market Performance & Policy

On August 1, equities sold off sharply, with the Dow down 500 points. Still, the S&P 500 stayed more than 25% above April lows and the Nasdaq over 35% higher, lifted by Microsoft, Meta, and other large firms.

Focus shifted quickly to the Fed. Futures priced in an ~89% chance of a September rate cut, supported by weaker data and policymakers’ willingness to ease if needed.

Key Economic Data (FRED):

• Fed Funds Rate: 4.33% (unchanged in July)
• Unemployment: 4.2%, up from June
• M2 Money Supply: $22.1 trillion, rising gradually

Consumer & Corporate Trends

Confidence softened as the Conference Board index fell to 97.4, with inflation expectations at 6.2% on essentials. At the same time, U.S. buybacks topped $1 trillion YTD, led by Apple, Alphabet, and JPMorgan.

Economic activity was mixed but resilient: manufacturing hit a three-year high at 53.3, while services held at 55.4, signaling expansion despite cost pressures.

Canadian Market Update

The S&P/TSX Composite hovered near 22,500 in August, weighed by softer energy prices but supported by financials and industrials. Oil slipped below $77, dragging resource stocks lower, though banks and infrastructure names held firm.

BNN Bloomberg highlighted investor focus on Bank of Canada policy. Markets now see elevated odds of an October rate cut as inflation cools. Housing activity steadied, with sales volumes improving in Ontario and British Columbia despite high mortgage rates.

The Globe and Mail’s Report on Business noted strong bank earnings, underpinned by robust capital and stable credit quality. Corporate investment in technology and infrastructure continues to offset commodity headwinds, suggesting moderate but steady growth heading into the fall.

Outlook

In the U.S., strong earnings and the prospect of Fed easing support cautious optimism. In Canada, resilient banks and central bank flexibility provide stability, though energy markets and trade remain watchpoints.

 Overview

Markets gained ground in July, lifted by strong tech earnings and a steady hand from central banks. Momentum was challenged late in the month by renewed U.S.–Canada trade tensions and rising bond yields. Despite those headwinds, both U.S. and Canadian equities closed the month in positive territory.

U.S. Market Performance & Policy

U.S. indexes posted solid gains, with the S&P 500 up approximately 2.2% in USD (3.6% in CAD). The rally was driven by earnings from Microsoft, Meta, and other AI leaders. The Federal Reserve held its benchmark rate at 4.25–4.50%, though two policymakers dissented in favor of a cut. Chair Powell emphasized a data-driven approach, leaving markets speculating about possible action in September.

Key Economic Data (U.S.)

• Unemployment remained at 4.2%, while the economy added 139,000 jobs.
• Consumer spending rose 0.5%—the strongest pace in four months—led by housing, financial services, and healthcare. Inflation accelerated slightly: core PCE rose 0.3% MoM, pushing the annual core rate to 2.9%.
• Job openings declined by 176,000 to 7.18 million, and layoffs increased, reflecting cooling labor demand.

Canadian Market Update

The S&P/TSX Composite rose about 1.5% in July, closing near 27,260. Tech and energy stocks outperformed, while rising yields (10-year Government of Canada bonds rose to 3.45%) weighed on fixed income. Inflation ticked up to 1.9% in June, dampening expectations for a Bank of Canada rate cut at the July 30 meeting. Trade tensions added uncertainty as markets eyed an August 1 tariff deadline. Despite this, strong U.S. earnings helped support Canadian equities, and investor sentiment remained resilient. Consumer & Corporate Trends Microsoft and Meta earnings boosted confidence across markets. Spending strength and earnings quality offset inflation concerns, though bond market volatility signaled investor caution.

Outlook

In the U.S., solid earnings and consumer resilience support a cautiously optimistic view. In Canada, a strong TSX and stable credit conditions offer a positive backdrop, though inflation and trade remain watchpoints.

Overview

CTI Capital’s monthly review finds that markets entered August cautiously after record-setting July gains. Early weakness came from soft labor data, tariff concerns, and rising bond yields. Resilient corporate earnings and expectations of a Federal Reserve policy shift helped stabilize sentiment by month-end.

U.S. Market Performance & Policy

On August 1, equities sold off sharply, with the Dow down 500 points. Still, the S&P 500 stayed more than 25% above April lows and the Nasdaq over 35% higher, lifted by Microsoft, Meta, and other large firms.

Focus shifted quickly to the Fed. Futures priced in an ~89% chance of a September rate cut, supported by weaker data and policymakers’ willingness to ease if needed.

Key Economic Data (FRED):

• Fed Funds Rate: 4.33% (unchanged in July)
• Unemployment: 4.2%, up from June
• M2 Money Supply: $22.1 trillion, rising gradually

Consumer & Corporate Trends

Confidence softened as the Conference Board index fell to 97.4, with inflation expectations at 6.2% on essentials. At the same time, U.S. buybacks topped $1 trillion YTD, led by Apple, Alphabet, and JPMorgan.

Economic activity was mixed but resilient: manufacturing hit a three-year high at 53.3, while services held at 55.4, signaling expansion despite cost pressures.

Canadian Market Update

The S&P/TSX Composite hovered near 22,500 in August, weighed by softer energy prices but supported by financials and industrials. Oil slipped below $77, dragging resource stocks lower, though banks and infrastructure names held firm.

BNN Bloomberg highlighted investor focus on Bank of Canada policy. Markets now see elevated odds of an October rate cut as inflation cools. Housing activity steadied, with sales volumes improving in Ontario and British Columbia despite high mortgage rates.

The Globe and Mail’s Report on Business noted strong bank earnings, underpinned by robust capital and stable credit quality. Corporate investment in technology and infrastructure continues to offset commodity headwinds, suggesting moderate but steady growth heading into the fall.

Outlook

In the U.S., strong earnings and the prospect of Fed easing support cautious optimism. In Canada, resilient banks and central bank flexibility provide stability, though energy markets and trade remain watchpoints.

 Overview

Markets gained ground in July, lifted by strong tech earnings and a steady hand from central banks. Momentum was challenged late in the month by renewed U.S.–Canada trade tensions and rising bond yields. Despite those headwinds, both U.S. and Canadian equities closed the month in positive territory.

U.S. Market Performance & Policy

U.S. indexes posted solid gains, with the S&P 500 up approximately 2.2% in USD (3.6% in CAD). The rally was driven by earnings from Microsoft, Meta, and other AI leaders. The Federal Reserve held its benchmark rate at 4.25–4.50%, though two policymakers dissented in favor of a cut. Chair Powell emphasized a data-driven approach, leaving markets speculating about possible action in September.

Key Economic Data (U.S.)

• Unemployment remained at 4.2%, while the economy added 139,000 jobs.
• Consumer spending rose 0.5%—the strongest pace in four months—led by housing, financial services, and healthcare. Inflation accelerated slightly: core PCE rose 0.3% MoM, pushing the annual core rate to 2.9%.
• Job openings declined by 176,000 to 7.18 million, and layoffs increased, reflecting cooling labor demand.

Canadian Market Update

The S&P/TSX Composite rose about 1.5% in July, closing near 27,260. Tech and energy stocks outperformed, while rising yields (10-year Government of Canada bonds rose to 3.45%) weighed on fixed income. Inflation ticked up to 1.9% in June, dampening expectations for a Bank of Canada rate cut at the July 30 meeting. Trade tensions added uncertainty as markets eyed an August 1 tariff deadline. Despite this, strong U.S. earnings helped support Canadian equities, and investor sentiment remained resilient. Consumer & Corporate Trends Microsoft and Meta earnings boosted confidence across markets. Spending strength and earnings quality offset inflation concerns, though bond market volatility signaled investor caution.

Outlook

In the U.S., solid earnings and consumer resilience support a cautiously optimistic view. In Canada, a strong TSX and stable credit conditions offer a positive backdrop, though inflation and trade remain watchpoints.