6 mins
Stock markets and the economy

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January 2024 - A mixed start to the year

The global equity markets were generally up in January, although regional disparities persisted. The developed markets continued to benefit from the resilient U.S. economy as well as investor expectations that the world’s major central banks will cut rates aggressively in 2024. Emerging markets had a more difficult month, however, weighed down by the economic situation in China, even though the government announced a new stimulus package designed to bolster the world’s second-largest economy. This context benefited quality stocks and stocks with a growth bias.

Variation vs
Variation vs
Interest rate in Canada (%)
Key rate
Key rate 5.00 0.00 0.00
Commodities ($US)
Oil (WTI)
Oil (WTI) $75.82 5.5% 5.5%
Gold $2,039.16 -1.1% -1.1%
EUR/CAD 1.45 -0.6% -0.6%
JPY/CAD 0.01 -2.4% -2.4%
USD/CAD 1.34 1.3% 1.3%

Sources: Bank of Canada, Fundata, U.S. Energy Information Administration


0.6% (S&P/TSX Composite 31-01-2024)

The Canadian market ended the month with a small gain of 0.6%, as measured by the S&P/TSX Composite Index, owing to the underperformance of materials and financials, two sectors that account for a substantial portion of the index. Conversely, information technology, industrials and energy contributed the most to the return. 

The Canadian bond market ended January with a return of -1.4%, as measured by the FTSE Canada Universe Bond Index. The market readjusted to the latest inflation and housing data, which slightly pushed back the time when the Bank of Canada can start cutting rates. 


3.0% (S&P 500 31-01-2024 in CAD)

The U.S. stock market rose once again at the start of the year as the country’s economy continued to defy expectations of a slowdown after the most aggressive monetary tightening in decades. The S&P 500 Index reached all-time highs and ended with a monthly return of 1.7% in local currency. The greenback’s strength against the loonie even increased the gains, such that the return was 3.0% in Canadian dollars. Seven of the 11 sectors posted gains (in Canadian currency), led by communication services and information technology. Conversely, real estate and materials suffered the largest losses. 


1.2% (MSCI Europe 31-01-2024 in CAD)

The European market also advanced, amid encouraging inflation data from the euro zone and the United Kingdom in particular, as well as expectations that central banks may start easing monetary policy. The MSCI Europe Index returned 1.3% in local currencies and 1.2% in Canadian dollars. Information technology and health care were the strongest performers, whereas utilities and materials were the weakest.


-0.4% (MSCI AC Asia-Pacific 31-01-2024 in CAD)

The MSCI All Country Asia Pacific Index ended the month with a return of 0.5% in local currencies and -0.4% in Canadian dollars. From a sector perspective, energy and utilities posted the largest gains. Conversely, materials and real estate ended with the biggest losses. From a regional perspective, India, with its significant structural growth, and Japan contributed the most to the return. At the other end of the spectrum, South Korea and China were the main detractors. 


-3.4% (MSCI Emerging Markets 31-01-2024 in CAD)

As already noted, the January results for emerging markets were more mixed than those of developed markets. The MSCI Emerging Markets Index returned -3.5% in local currencies and -3.4% in Canadian dollars, with China, South Korea and Brazil dragging the index down. Chinese equities fell after the release of disappointing growth data linked to weak industrial earnings and even deflationary pressures. In addition, the real estate crisis continued to weigh on the country’s economy. From a sector perspective, only energy and utilities posted gains.

Reading in progress:January 2024 - A mixed start to the year


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