Market Recap* – September
1. What happened in the markets?
September was a positive month for global markets, with both stocks and bonds advancing after central banks shifted toward a more supportive stance. In Canada, the S&P/TSX Capped Composite Index climbed 5.4% as investors welcomed the Bank of Canada’s 25-basis-point rate cut and stronger performance from resource and financial companies. The combination of higher commodity prices, easing inflation pressures, and improved investor confidence helped lift the Canadian market. South of the border, the S&P 500 gained 3.65% as the Federal Reserve also lowered interest rates, easing concerns about slowing growth and keeping optimism alive for a soft landing. Overseas, the MSCI EAFE Index rose 3.28%, reflecting stable inflation trends and firmer sentiment in major European and Asian markets.
Bond prices also strengthened through the month, supported by the rate cut and growing expectations of looser monetary policy ahead. The broad Canadian bond market gained 1.89%. Investors continued to show interest in quality credit as borrowing costs began to ease.
Money-market investments remained steady, with 91-day Treasury Bills posting a modest 0.27% gain, reflecting limited price movement but consistent income generation.
In currencies, the Canadian dollar weakened over the month against the U.S. dollar. The softer looney made foreign investments more valuable when converted back to Canadian currency, providing a light boost to overall returns.
2. What does it mean for Embark Funds?
| Asset class change | Impact on cohorts |
|---|---|
| Equities ↑ | Positive for younger cohorts with higher equity exposure, as markets posted solid gains. |
| Bonds ↑ | Supportive for older cohorts closer to maturity, as bond prices rose following the Bank of Canada’s rate cut. |
| Money Market ↑ | Offered consistent income and capital stability, helping preserve value for cohorts nearing maturity. |
| Canadian Dollar ↑ | The weaker Canadian dollar increased the value of foreign investments, adding a small boost to the overall returns. |
This market commentary is provided for informational purposes only and does not constitute investment advise. References to financial market performance are based on publicly available data and reflect general conditions during the period noted. Past performance is not indicative of future results, and the impact of market events on the firm’s investments may differ from the broader market.