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Stock markets and the economy

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June 2024 - Political uncertainty

The global stock markets posted mixed results in June. The indexes in the United States, Asia and emerging markets advanced as major tech companies continued to be propelled upward by enthusiasm over artificial intelligence (AI). In contrast, the other sectors generally remained under pressure in the face of economic uncertainty, especially in Canada. European equities had a challenging, volatile month as political risks intensified. The European Parliament election increased the unpredictability, as did the dissolution of France’s National Assembly by President Emmanuel Macron and his calling of a snap election with a highly uncertain outcome. 

As for monetary policy, the Bank of Canada and the European Central Bank have begun lowering their interest rates, raising hopes that the U.S. Federal Reserve will soon follow in their footsteps.

Variation vs
Variation vs
Interest rate in Canada (%)
Key rate
Key rate 4.75 -0.25 -0.25
Commodities ($US)
Oil (WTI)
Oil (WTI) $81.54 5.9% 13.8%
Gold $2 326.75 0.0% 12.8%
EUR/CAD 1.47 -1.0% 0.2%
JPY/CAD 0.01 -1.9% -9.3%
USD/CAD 1.37 0.4% 3.4%

Sources: Bank of Canada, Bloomberg Finance L.P.


-1.4% (S&P/TSX Composite 30-06-2024)

The Canadian market showed signs of weakness in June. The S&P/TSX Composite Index ended the month with a -1.4% return, mainly because lower commodity prices caused the energy and materials sectors to lose ground. Financials also detracted from the return, as the slowing economy and deteriorating credit quality prompted Canadian banks to increase their loan-loss provisions, namely the cash reserves they set aside to cover loans if borrowers cannot service their debt. 

In contrast, the Canadian bond market welcomed the Bank of Canada’s decision to cut interest rates in order to support the economy amid moderate inflation and weaker growth indicators. The FTSE Canada Universe Bond Index returned 1.1% on the month.


4.0% (S&P 500 30-06-2024 in CAD)

In the United States, the information technology sector lifted the market to yet another record. The S&P 500 Index hit its 30th all-time high this year and posted a monthly return of 3.6% in U.S. dollars in June. The gain was 4.0% in Canadian dollars. Despite signs of a slowdown in the U.S. economy and labour market, investors were still optimistic that the Fed would cut interest rates by year-end. Data released at the end of the month showed that inflation was moderating in the United States and reinforced that sentiment.


-1.9% (MSCI Europe 30-06-2024 in CAD)

The European markets were highly volatile, mainly because of the results of the European Parliament election and political instability in France, as already noted. Moreover, the European Central Bank revised its inflation and growth forecasts upward, creating uncertainty about its next move, despite an initial rate cut in June. In this context, the MSCI Europe Index ended the month with a return of -1.4% in local currencies and -1.9% in Canadian dollars. All sectors were down except information technology and health care. 


2.8% (MSCI AC Asia-Pacific 30-06-2024 in CAD)

The benchmark MSCI All Country Asia Pacific Index returned 3.1% in local currencies and 2.8% in Canadian dollars. The Asian markets advanced on the strength of Taiwanese and South Korean tech stocks, which also benefited from enthusiasm over AI. In contrast, Japan detracted the most from the return because of rising inflation and uncertainty about the direction of the country’s monetary policy.


4.4% (MSCI Emerging Markets 30-06-2024 in CAD)

Emerging markets outperformed developed markets in June, buoyed by strong performances by the Taiwanese and South Korean markets. The MSCI Emerging Markets Index returned 4.3% in local currencies and 4.4% in Canadian dollars. India also contributed positively with its solid growth prospects. In contrast, Mexico’s presidential election created turbulence, causing a sharp downturn on the local stock market. 

Reading in progress:June 2024 - Political uncertainty


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