Mike’s October 2024 Monthly Recap

October started out well for stocks. In Canada, the central bank decreased interest rates by a larger than expected ½%. This spurred on the values of dividend-paying stocks. The inflation rate in Canada for October came in at 1.6%, which is lower than their target of 2% and gives the bank more room to cut in the future. The market was hitting new highs by October 18, but a round of profit-taking (investors selling to lock in profits) took the market back down to about even for the month by October 31.

There were no further interest rate decisions in the US, but optimism about the state of the economy and good corporate earnings sent stock prices into record territory yet again. Of note, Microsoft, Alphabet (formerly Google), and Meta (formerly Facebook) all reported very strong earnings and growth as their businesses continue to benefit from excitement over AI. Interestingly, both Google and Meta fell in early trading after reporting results on disappointment; they weren’t better. From my perspective, they remain top picks. The US economy grew at a rate of 3% in the third quarter of 2024, and unemployment remains low. On the last day of the month, Amazon.com reported very strong numbers, and the market was heading higher on November 1.

Of course, now we must get through the US election. Regardless of who wins, it appears that there will be litigation and protests that delay any actual result for some time. So far, stocks seem to be ignoring the election to focus on the economy. Hopefully that remains true.