2024 Market Summary

What worked and did not work in 2024

	Canada	U.S.A.
Best performing sectors	• Information Technology • Materials • Financials	• Information Technology • Consumer Discretionary • Financials
Worst performing sectors	• Communications Services • Real Estate • Health Care	• Materials • Health Care • Real Estate

Canada’s economy flat in 2024 – lower interest rates

Canada’s inflation rate was 1.9% in November 2024 - a huge improvement from the 8.1% high in June 2022. Conversely, the unemployment rate rose to 6.8% – the highest rate since 2017. Gross Domestic Product (GDP) was up 0.3% in the third quarter. Canadian productivity (a measure of real GDP per hour worked) has decreased four quarters in a row. In response to higher unemployment and lower productivity, the Bank of Canada lowered its official interest rate five times since June 2024 from 4.75 to 3.25% (the recent high official interest rate was 5.25% July 2023).

The U.S. economy is the strongest in the world right now

U.S. real GDP increased 3.1% annually in the third quarter. In November, the U.S. unemployment rate was 4.2%, and the inflation rate was 2.75%. In 2024, the U.S. Federal Reserve lowered the target federal funds rate twice to today’s 4.25% - 4.50%. The U.S. economy is so strong that the Federal Reserve has indicated that large rates cuts are unlikely in 2025.

Canadian dollar has fallen versus the U.S. dollar

The widening difference between Canadian and U.S. interest rates, and recent political instability in Ottawa, have contributed to the Canadian dollar falling against the U.S. dollar.  This year the CAD/USD foreign exchange rate has risen from 1.33 CAD to 1.44 CAD per 1.00 USD.  An 8.2% difference.

2024 was the biggest election year in history across the globe

In elections around the globe, incumbent candidates lost.  In the United States, the stock markets reacted favorably to the election of the second Trump administration. President-elect Trump has warned of 25% tariffs on goods from Canada and Mexico if immigration and drug trafficking does not lessen. In Canada, the recent resignation of Prime Minister Trudeau and a lack of confidence in the current government suggests an election will be in the second quarter of 2025.  This will impact how the Canadian government will negotiate with the incoming Trump administration.

PMC continues to look long-term

This past year has shown that new variables can muddy the waters and make short term prognostications unreliable. There has been a positive reaction to the change of administration in the United States. Time will tell whether promises made on the election trail will be kept. Additionally, changes in the Canadian political landscape will add another variable to the mix.

PMC maintains a steadfast commitment to long-term investing, focusing on high-quality stocks with strong management and proven track records. Your portfolio is carefully structured to align with your individual risk-reward profile. We continuously evaluate new investment opportunities to enhance your portfolio and ensure its continued alignment with your long-term goals.

PMC in the NEWS

Anish Chopra was interviewed about markets by The Canadian Press, January 3, 2025. S&P/TSX composite rises after New Year's break, U.S. stocks down 

Client Question Corner

My friend’s credit card was scammed. She had over $2000 of charges that were not hers. What can I do to stop being scammed?               

Answer from the Ontario Securities Commission:

1. Delete unsolicited emails. Delete emails asking for personal information.
2. Never give out personal information over the phone. If the person claims they are from your bank or credit card company, hang up and call your financial institution at the number listed in the phone book or on their website to verify whether the call is legitimate. Only give out personal information if you initiate the call and you know you are dealing with a legitimate company. 
3. Keep your personal information safe. Keep your bank account and credit card information in a safe place. Don’t give out your passwords to anyone and don’t keep them in an obvious place like your purse or wallet. Shred or destroy anything with your account numbers on it. Avoid tossing receipts or statements into the trash. 
4. Be cautious when shopping online. Only enter your credit card number on secure websites that you know are legitimate. Don’t allow the site to keep your credit card information on file. Be selective about signing up for loyalty programs, contests, and offers for free rewards. Your information (e-mail address, phone number, online ID) gets added to lists, which are often sold or shared. 
5. Report lost or stolen credit cards immediately. The sooner you report a missing credit card, the less likely it is that you will have to pay for any false charges. 
6. Review your statements each month. If you notice a charge you did not make on your bank account or credit card, report it to your bank or credit card company immediately.

2024 was PMC’s 60th Anniversary!

We are proud of our long service to our clients.  In 1964, a young man named Richard Hurlburt turned his dream into a reality – he incorporated Portfolio Management Corporation as a wealth management firm.  His vision was to offer personalized service to clients.  As a result of this, we are privileged to be investing on behalf of third generation clients. 

Best wishes for a healthy and prosperous 2025!

Commentary reflects the opinions of Portfolio Management Corporation (PMC) at the time of writing and may reference sources that PMC believes to be accurate and reliable. PMC does not guarantee the accuracy or completeness of such information, and our opinions and viewpoints may change over time. Forward-looking statements are based on historical events and trends and may differ from actual results.