Category: insight
3 Min read | November 16, 2023

Market Monitor October 2023

  • Commentary
  • Market Monitor
Close-up of stock price graphs on a computer screen.
Summary:

Long term yields spooked the markets in October.

Highlights

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Conflict in the Middle East and markets

The Israel-Hamas war in the Middle East have not driven equities much lower, but it has led to increased volatility over the month and a flight to safety in gold. In addition to the supply-deficit situation prior to the conflict, oil prices also rallied amid concerns that an escalation into a wider regional conflict could disrupt oil supply.

 

High valuation dispersion in equity markets

The dispersion in valuations remains wide between sectors and between the largest 7 stocks and the rest of the market. This indicates that most of the market is still trading at reasonable valuation levels, in line with historical averages.

 

Canada on the brink of recession

August’s GDP data was weaker than expected, and preliminary indicators are pointing to stagnating growth in September again. These figures point to -0.1% of GDP growth in Q3, a second quarterly contraction. CD Howe Institute relies on a broader set of indicators before calling a recession, including breadth of GDP contraction and changes in employment.

 

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