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Global stock markets rebound

After a difficult month of May, stock markets worldwide rebounded in June. They reacted positively to the possibility that central banks will ease their monetary policies shortly and to the respite announced in the U.S.- China trade dispute.

Focus on the past month

Overview of global equity markets1

  • In Canada, the benchmark index of the Toronto Stock Exchange, the S&P/TSX, was up 2.5% in June
  • U.S. equity markets performed well, with the S&P 500 gaining 3.6% and the Nasdaq, 4.1%.
  • International stock markets were also in positive territory, as reflected by the 2.6% rise in the EAFE Index.
  • Emerging markets ended the period with a gain of 2.9%, while Chinese equity markets climbed 4.7%.

1 All the percentages in this section are in Canadian dollars.

Key events

  • The G20 summit held at the end of the month gave rise to a meeting between the U.S. and Chinese presidents. They agreed to resume talks with a view to a trade agreement and to put on hold the additional tariff increases that had been announced. Although this overture seems encouraging, the points of contention that remain will be the most difficult to settle.
  • Job creation in Canada fell, with 24,000 full-time jobs being filled while 26,000 part-time jobs were lost. The situation was very different in the United States, where 224,000 jobs were created versus expectations of 160,000.
  • The major central banks suggested that they could reduce their benchmark rates and put in place new measures to stimulate the economy. Despite strong job creation in June in the United States, the U.S. Federal Reserve will lower rates by at least 0.25% in July because of global trade uncertainties.
  • Saudi Arabia and Russia agreed to extend by nine months the agreement between OPEC and non-OPEC members to cut oil output. High U.S. oil production and the global economic slowdown are limiting the negative impact of the drop in Iranian oil exports related to the economic sanctions imposed on this country by the United States.
  • Government of Canada bonds posted a return of 0.3% for the period, bringing their year-to-date return in 2019 to 3.9%.2

2 Source : Canaccord Genuity 

Performance of our funds

In general, our funds performed relatively well in June and in the second quarter of 2019.

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