The challenges and opportunities of in‑between seasons

The transition from one season to the next can be a messy yet fascinating time. As winter gives way to spring, and spring blossoms into summer, we often find ourselves navigating a transitional phase where the previous season hasn't fully faded, and the new one hasn't quite taken hold.

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It's in these "in-between" moments that we can uncover both challenges and opportunities. The weather may be erratic, with pockets of warmth and sunshine mixed in with lingering cold or rainy days. Similarly, the economy can exhibit this dual nature, with some sectors thriving while others show signs of moderation.

While the broader market may feel expensive or uncertain, there are often pockets of value and growth waiting to be discovered. By understanding the nuances of this change in seasons, investors can position their portfolios to capitalize on the unique dynamics at play.

When we compare the second to the first quarter, the first saw a much-improved performance from equities beyond the big tech companies, while the second saw more of a divergence between equity market performance across economies.

Equity markets were mixed around the globe. In the U.S., investors saw the tech sector, or companies related to AI in general, continue to exceed expectations. They helped deliver positive outcomes for the S&P 500 and also drove the NASDAQ price return to 9.36% (in Canadian dollar terms).

In contrast, the Dow Jones Industrial Average was modestly negative, as were international equity markets and the TSX in Canada. This reflected the broad divergence that we’ve seen in terms of performance and the narrowness of equity market contribution to performance being centred around the U.S. tech sector.

Central bank policies pivot with moderation in economic data

The Bank of Canada and the European Central Bank chose to cut their respective policy rates by 0.25 percentage points in the quarter while signalling that further interest rate cuts were likely to follow through the remainder of 2024 and into 2025. This is in contrast to the U.S., where the U.S. Federal Reserve maintained its policy rate and has not yet signalled any rate cuts for 2024. 

Looking ahead to the remainder of 2024 and into 2025, we want to position rather than predict where the markets are heading. A well-balanced portfolio will be better suited to take advantage of any market opportunities.

The path from one season to the next is rarely a straight line but with the right mindset and strategies, you can turn this in-between phase into a source of consistent returns and financial confidence.

Find out more in our 2024 Second Quarter Market Review and Mid-Year Commentary.


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