November 2024 Market Recap
The main event for the month of November was the U.S. presidential election. While it was not a big surprise that Donald Trump won the election, it was a big surprise to me that it was not even close. He won the popular vote, the electoral college vote, and all the swing states, and the Republicans took back control of both the House and the Senate. There will be endless analysis about why this happened, but for our purposes, all we need to focus on is that it did happen.
The initial reaction by the investment markets has been very positive. Trump is seen as someone who will deregulate, cut red tape, decrease taxes, and, generally speaking, let businesses make as much money as possible. The stock market in the States had one of its best months ever after the election results.
Canadian stocks too joined in the rally. The belief here is that a strong U.S. economy will be good for Canada. Our economy remains stuck in the mud for the moment and could use the help. Also given the fact that interest rates are still likely to go down in December, investors have been able to remain positive so far.
On the other hand, this has given the Republican President a mandate to make dramatic changes. He has already made some very unusual cabinet picks and has threatened Canada, Mexico, and even the rest of the world with exorbitant tariffs. Make no mistake, tariffs will be terrible for the Canadian economy. However, it is not clear that tariffs are actually coming; most analysts believe that this is just a negotiating ploy. But I do feel that the next four years could be full of chaotic threats, counter threats, and overall difficult relations between Canada and the U.S.
Donald Trump’s main thesis is to put American economic interests above all else. It seems reasonable to believe that the U.S. stock market can remain positive for the first part of his term as he seeks to change the status quo. It also seems reasonable to assume that the uncertainty that he brings will create a stiff headwind to the Canadian economy. Business investments are often delayed or cancelled in the face of uncertainty. However, we survived him once, and I firmly believe we can do it again. It just might be a very bumpy ride. Hold Tight!
Mike Stott
Disclaimer:
Information in this article is from sources believed to be reliable, however, we cannot represent that it is accurate or complete. It is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell securities. The views are those of the author, Michael Stott, and not necessarily those of Raymond James Ltd. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decision. Raymond James Ltd. is a Member Canadian Investor Protection Fund.
